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User Journal

Journal Journal: Watchmen 5

This is not a review, the movie had enough of those, this is just a thought. Apparently what people expect from their superheros nowadays is ability to sacrifice millions 'for the sake of saving billions' and the superheros who refuse to go alone with that scheme must be killed (and they are in the movie). I think the director is counting on securing support of an average movie-goer, selling him on the idea that sacrificing a small number of people is just fine as long as the majority supposedly gains from it.

Of-course the entire concept is nonsense, there can be no beneficial murder. Sacrificing a minority for the benefit of a majority is not a virtue, it is a crime against individuals and their rights. Also while believing that world's super-powers (the countries with nuclear potential to destroy the planet) would cooperate against a common enemy is somewhat sound, believing that such a truce would be long lived or would lead to a more stable situation is nonsense. Power will not be shared and it only takes a little time before the old enemies are at each other's throats again. Of-course there is an added level of 'benefit' that their major cities are destroyed, which cannot make political or economic situation more stable, it would however achieve the exact opposite result.

If the Ozymandias (Adrian Veidt) wanted to increase stability in the world and achieve some for of higher cooperation among enemies, given his insight into limitless power he could have fairly easily achieved this goal by supplying the world with huge amount of very cheap energy. He could set up multiple corporations around the world selling the energy so cheaply, first he would put many 'old world' energy companies out of business but then he would provide enough energy for many new forms of businesses to be created. Cheaper food production and manufacturing, cheaper shipping, cheaper communications. Everything that he could do with the power and he chooses to pursue his idea of playing out the dreams of another murderer from history - Alexander the Great.

If after watching this movie an average person is left with an impression that it is an acceptable thing to do, to sacrifice minority for the benefit of majority (even if it means ideas based around grandiose totalitarian utopia and even when it is masked with a supposed formula for survival) then the director has done his job in cementing more of this collectivist ideology of central planning, the anti-humanist idea that anything goes as long as the technocrat can sell it as if it is done "for the greater good".

The greatest crimes on this planet were committed by people promising to ensure "the greater good". The future of such crimes is not behind single individuals, it is behind the mob, voting completely democratically to bring about yet another totalitarian regime. A regime that would take care of the mob by making a beneficial sacrifice of a small number of people (and small number of people would always lose in a democratic elections, thus the definition of mobocracy).

From murder of millions to "save billions" in the super-hero movies to taxing the few wealthy 1-2% apparently to ensure economic prosperity of everybody else. It doesn't work in the movie and it doesn't work in real life. It's not good morality and it's not good economics, but it makes a great show and sounds good in politics.

User Journal

Journal Journal: Another day on /. 21

Another day on /., another batch of troll moderators perpetrating a coordinated (or an uncoordinated) moderation attack as has been the case for a few months now. One thing is for sure, they don't forget to go back to comments made days ago and moderate them down religiously, whatever they are. It is especially effective in case when the story is no longer on the front page (but also it doesn't matter much I suppose either, nobody is really reading any longer at that moment in time) The comments that are moderated somewhat above the -1 score will be moderated down by subsequent moderators, who will also come over to the page to get rid of any positive scores. Often the moderations happen in batches, which is easy to see, since moderations of multiple comments happen within a span of a couple of minutes. Very often the comments are left with moderation: '-1 Insightful' or '-1 Informative' or '-1 Interesting'.

The comments are mostly moderated Troll, sometimes Flamebait, sometimes Offtopic and sometimes simply Overrated.

http://slashdot.org/comments.pl?sid=3271939&cid=42082389
http://slashdot.org/comments.pl?sid=3285849&cid=42145513
http://slashdot.org/comments.pl?sid=3285849&cid=42141191
http://slashdot.org/comments.pl?sid=3285849&cid=42141773
http://slashdot.org/comments.pl?sid=3285849&cid=42143905
http://slashdot.org/comments.pl?sid=3277961&cid=42122005
http://slashdot.org/comments.pl?sid=3277961&cid=42108499
http://slashdot.org/comments.pl?sid=3268717&cid=42081901
http://slashdot.org/comments.pl?sid=3285849&cid=42142255
http://slashdot.org/comments.pl?sid=3285849&cid=42142071
http://slashdot.org/comments.pl?sid=3285849&cid=42147381
http://slashdot.org/comments.pl?sid=3285951&cid=42143153
http://slashdot.org/comments.pl?sid=3283411&cid=42136283
http://slashdot.org/comments.pl?sid=3285849&cid=42150163
http://slashdot.org/comments.pl?sid=3268575&cid=42071993
http://slashdot.org/comments.pl?sid=3264197&cid=42054329
http://slashdot.org/comments.pl?sid=3252007&cid=41989849
http://slashdot.org/comments.pl?sid=3252007&cid=41989333
http://slashdot.org/comments.pl?sid=3226777&cid=41853665
http://slashdot.org/comments.pl?sid=3213607&cid=41792577
http://slashdot.org/comments.pl?sid=3190035&cid=41676693
http://slashdot.org/comments.pl?sid=3190035&cid=41676419
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http://slashdot.org/comments.pl?sid=3177025&cid=41614533
http://slashdot.org/comments.pl?sid=3173577&cid=41597403
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http://slashdot.org/comments.pl?sid=3171677&cid=41594163
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http://slashdot.org/comments.pl?sid=3270349&cid=42075911
http://slashdot.org/comments.pl?sid=3270349&cid=42074975
http://slashdot.org/comments.pl?sid=3268717&cid=42081901
http://slashdot.org/comments.pl?sid=3209851&cid=41771959

including comments in my journal
http://slashdot.org/comments.pl?sid=3284211&cid=42150003

Clearly the intent behind the moderation is to silence the opinion, not for any other purpose, since moderating past commentary this way does not have any role in any current discussion, so the reason to moderate comments in stories that nobody is reading for a few days is to ensure that in the future only a limited number of comments can be made from the account (2 comments per 24 hours is the maximum that can be made when the 'karma' score is minimal.)

The attack is obviously personal in nature, since the same exact thing is happening in my second account and the responses that are left on my comments after the moderation by various ACs imply that this is done to ensure that the voice of the opposition to their ideology is silenced.

http://slashdot.org/comments.pl?sid=3235701&cid=41905697
http://slashdot.org/comments.pl?sid=3235701&cid=41905557
http://slashdot.org/comments.pl?sid=3256323&cid=42007053
http://slashdot.org/comments.pl?sid=3256323&cid=42010667
http://slashdot.org/comments.pl?sid=3249045&cid=41971985
http://slashdot.org/comments.pl?sid=3245439&cid=41980781
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http://slashdot.org/comments.pl?sid=3245439&cid=41955583
http://slashdot.org/comments.pl?sid=3245439&cid=41955521
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http://slashdot.org/comments.pl?sid=3221699&cid=41833697
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http://slashdot.org/comments.pl?sid=3214597&cid=41799765
http://slashdot.org/comments.pl?sid=3212291&cid=41784887
http://slashdot.org/comments.pl?sid=3212023&cid=41782063
http://slashdot.org/comments.pl?sid=3209851&cid=41777533
http://slashdot.org/comments.pl?sid=3209851&cid=41776087
http://slashdot.org/comments.pl?sid=3194501&cid=41699793
http://slashdot.org/comments.pl?sid=3194501&cid=41693533
http://slashdot.org/comments.pl?sid=3192069&cid=41685021

Of-course not every comment there is at the bottom of the score pyramid, however the moderations that push the comments down come after the discussions are over, a couple of days after nobody else is reading the threads, which simply shows the indiscriminate nature of the attack.

Clearly there are people who cannot argue against my type of message but they surely do not want to have my message around to create an echo chamber that prevents any sort of a real discussion.

User Journal

Journal Journal: Class warfare 17

Given the modern time attitudes on class warfare with comments like these insisting that the class war is waged by the rich on the middle class and the poor, and generally the media and politicians insisting that the 'rich are not paying the fair share', I decided to take a look at historic income tax data that can still be found on IRS site
Individual income tax returns starting from 1954

Business tax returns starting from 1959

The current tax returns up to 2010

It is a surprise to look at those records, since the currently accepted message is that the rich are paying much less than before and that they were paying much more in the fifties when the tax rates were up to 70 and even 91%.

Happy to report that this is pure nonsensical propaganda.

An example of individual income returns from 1958 and 2012 shows that only 236 people paid some money at the silly 91% rate that is out of 45.6 Million tax returns that were filed.

Another interesting finding is that 0.178% of all returns filed paid 35% or higher, which means only 8549 people paid 35% in taxes or more. 3.5% of all income taxes in 1958 were paid by these top earners, who paid 35% or more in taxes.

Compare that to the current situation, there are 2.5Million taxpayers (which is almost 2% of all tax payers) that paid 35% or more.
Interestingly enough today 3.5% of top earners pay 41.5% of all income taxes.

So how can this be that the populist message is that in 1950s the tax code was so much more progressive and the rich paid so much more in taxes (and that's apparently why the economy was so strong, or so the liberals and progressives tell us today), yet today 2.5 Million people pay 35% or more in taxes and pay 41.5% of all income taxes while in 1958 only 8549 people (0.178 of all filers) paid 35% or more in taxes, which constituted only 3.5% of all income taxes.

Clearly the propaganda machine is well and running.

User Journal

Journal Journal: Review of The Campaign (the film) 2

Finally I got to watch a movie I heard of some time ago, it's called The Campaign with Will Ferrel, Zach Galifianakis, John Lithgow, Dan Aykroyd, Brian Cox and others. It has some memorable moments and it is definitely funny. Unfortunately the message that it is sending is horrendous, to explain what I mean by this I will have to give out many spoilers, so if you don't want to see any of that stop reading right here.

The movie is about a 4 term Democratic Congressman, Cam Brady (Ferrel), running for the 14th district in North Carolina, who is behaving like a clown mostly because he has no positions of his own and he is quite silly in real life. As he says (paraphrasing): America, Jesus, Freedom, I don't know why they like when I say it but they do and so I say it. He is such a clown though, that eventually it costs him his political capital and a powerful business interest, represented by "Motch Brothers" (Aykroyd, Lithgow) (an obvious jab towards the Koch brothers), who are interested in increasing efficiency of their production facility in China, and to do this they want to open factories in America and bring Chinese labour to those factories. The reason in the movie is that the Chinese work for 50 cents an hour and work in unsafe conditions. In order to achieve this, the Motch brothers went on buying large pieces of land in the 14th district and now they need their own Congressman to pass legislation that would abolish the minimum wage and the EPA rules, which would not normally allow operation of that type of a factory because of some form of pollution that it would produce. The factories in America would increase profits of the operation by cutting down shipping costs but they would be manned by the 'insourced' Chinese labour, not by American workers.

Normally the Motch brothers would just buy Cam Brady, but Brady is having political problems and so they came up with a simpleton Republican candidate, Marty Huggins (Galifianakis), son of Raymond Huggins (Cox) to run against Cam Brady. A number of hilarious scenes are then shown, with various comical situations where Huggins is running against Brady. However somewhere alone the line, Brady finds out about Motch brothers intentions and decides to go against them because he finds their actions immoral. The Motch brothers then turn the game around, approach Brady and eventually rig the elections and ensure that Brady wins. However after the elections, Brady talks to Huggins and changes his mind, declares that he is not a good Congressman but a good Politician and resigns, asking Brady to become the Congressman instead. At the end everybody is happy that the Motch brothers lost the money on their land deals and that the factories will not be opened in the 14th district.

Ok, so that's the story. If you are like most other people who watch this movie, you are led towards the conclusion that is imposed upon you by the makers of the film, you probably think that this is a great win for America (Jesus and Freedom), and the People, who are standing strong against the powerful evil, profiteering business interests and that the politicians, while misguided, are actually good guys and they are together with the people and they just need to be shown what is the right thing in order to do it.

There are a number of serious problems with this movie, starting with the fact that this is a great piece of pro-collectivist, pro-central planning, anti-competitive, anti-capitalist, anti-humanist, anti-Constitutional propaganda. Of-course there is an attempt to hide it behind the veil of being non-partisan, since it is the Democrat, who is shown to be the politician that is in the wrong (for the most of the movie) and it is a Republican candidate that is shown to be in the right (once he gets the situation), however what is actually shown is that the Republican candidate is not actually a Republican, or put more correctly, he is not actually a conservative candidate.

A conservative candidate should understand that bringing production facilities to America is a good development. This means brining investment capital into the country, allowing tools, machinery, supply chain, management to be established to produce the goods that people apparently want to buy. After all, the Motch brothers said they were making double profits by moving production to China already and they would make double profits on top of double profits by moving production facilities back to America as long as they could produce in the same conditions as they did in China. This means that the product (kids toys, dolls and such), are a well selling product in America, so Americans are happy to buy the cheaper product that is produced in China (there wouldn't be any doubling of the profits if the Americans didn't buy more of the product, and by moving production to China, the Motch brothers lowered their production costs, allowing them to lower the sale prices and thus capturing more of the market share).

A conservative candidate should understand that government regulations surrounding minimum wage and EPA laws are actually hurting the economy and preventing businesses from bringing in capital into the country, preventing new production facilities to start manufacturing again. In fact any number of insourced Chinese labourers would still be better for the Americans, if the product was manufactured within the borders, the cost of the final product would be lower, the pollution and energy expense due to shipping would be lower, the trade deficit would be lower (those goods don't have to be imported if they are produced domestically), the Chinese workers would be spending their earned salaries in USA, there are all the income taxes that would be paid, the 14th district would rebuild some of the supply chain links, there would be more jobs eventually surrounding the factories. If the operation proved successful, more factories could be open in USA eventually, and Americans would start working in them again, even though without the minimum wage and EPA laws, but they would have jobs that would further reduce economic dependency on the rest of the manufacturing world. Eventually the Americans would decrease the trade deficit and would start working out the debt problem, and as more of the capital would be saved, the factories could be made more and more efficient, but this nearly always means less and less polluting without any EPA rules, that's just how technology works. The minimum wage laws are a problem in America and the rest of the Western world, with tens of millions unemployed people it should be obvious that minimum wage and the welfare state is the wrong path for economic growth and prosperity.

Of-course there are other problems with the movie, as I mentioned already, the politicians are shown as almost noble people, who are truly there for the 'common good' and for 'the people' and anything that they do wrong only is a consequence of the greedy, evil business interest. The politicians are shown in a positive light and the business people are shown to be evil. However it were the business people that tried brining the capital and production back into USA and it were the politicians that stopped it in this movie. It were the Motch brothers that wanted to open the factories, nobody else did. The business people are shown to be immoral, evil, greasy profiteers, who do not think about anything else but themselves.

Of-course what is omitted is the fact that these very 'greedy, evil' businessmen brought the goods to the Americans, that the Americans were willing to buy voluntarily, without any forceful coercion. This is exactly what makes businessmen and profits a much more moral enterprise than any politician, because politicians are pushing laws on people that people would normally not want to comply with voluntarily and this is done through threat of government violence. Also while businessmen are thinking profits first of all, that does not change the reality that profits made out of voluntary exchange of products and services allow for actual economic growth, that is because obviously the consumption of the wealthy individuals is limited to some amount per year, but their investments are limited only by their ability to earn. And so by limiting wealthy people's ability to earn with laws, regulations, taxes, inflation, what is actually limited is not their consumption but their savings and thus their investments, which means production.

The point is that the makers of this movie rely on people's lack of understanding of all things: economics, politics, history. It is unfortunate that most people will likely simply follow the path that is laid before them by the producers, take the bait and leave having a stronger belief that the government is the actual answer to the economic and societal problems, while business and free market is the wrong approach. Of-course the reality is that it is only business within the context of competitive free market capitalism that allows growth of economic wealth and thus improving quality of life for everybody in the society.

In this case the 'trickle down' part of the economics was the cheap, abundant products created by the capitalists and the new investments available to the society via the savings and investments that come out of profits made on the sale of those products. The efficiencies that are gained by the Motch brothers, which allow them to make more profits by running factories closer to where the sale occurs, also allows bringing the price for the final product down, which allows the consumer to have more purchasing power, because he now has to spend less money buying that very product.

The politicians of-course are not fighting to get elected to stand for any real economic growth or the people, if they were, they would be on the side of all people, not just the majority, who wants to impose various confiscatory policies upon those, who are much more productive and thus have more earning power themselves. Quite the opposite is true, the politicians know very well that they can always pander to the public and use that as leverage to pass various legislation, that forces the businesses to shell out more money to those very politicians, so that the businesses could get around the legislation. Of-course this has many effects, first of all it fills the coffers of the politicians, but it also limits competition only to those companies, who get access to the political power. Coincidentally this reduces competition in the market and causes prices for the end consumers to rise, which reduces efficiency and steal purchasing power from the people, while simultaneously reducing the economic activity that would otherwise take place.

So this movie, while being hilarious in places, is extremely damaging if taken on its face value, but that is the most likely outcome for the most of the public that will end up watching this great piece of anti-capitalist, pro-collectivist and thus pro-government and anti-individual rights propaganda.

User Journal

Journal Journal: Bernanke votes for Obama 1

Federal Reserve came out with an open ended QE, the sequence number does not matter (it's officially 3, but really it's much more than that, Federal Reserve has been buying up bonds and generally creating fake money and propping up the financial sector for a very long time now).

Of-course the economy is as always the victim of this type of behaviour, the savers are further punished, anybody living off of fixed income is further punished, everybody living pay check to pay check is further punished, because all new money that the government creates either prevents deflation (which is a normal situation for a productive market) or it even forces the prices to increase (which is what the majority of people think of when they think about inflation).

Of-course rising prices are not a meaningful measure of economy at all, actually falling prices is a better measure, because it means there is more competition, there are more efficiencies, better technology, more automation, all of which allows the businesses (corporation and other types of businesses) to lower their prices to compete for the customer base. That was a normal course of events for USA before the Federal Reserve was set up, almost 100 years ago. Prices were falling and the money was growing in value.

The increase in prices in the markets will be blamed by the politicians upon the speculators, but of-course speculators are not to blame for the increase of prices, as far as the market is concerned, the speculators have really under-appreciated real assets. The prices of commodities and equities are being held down relative to the promise of open-ended Federal Reserve action. When somebody says: gold is too expensive at 1700 per ounce, they don't realise that they are measuring the value of gold is a currency that has no value at all given the promise of the Federal Reserve and all other central banks in the world to buy up debt with fake money. This is monetisation of debt, this is the reason for the equity prices going up as well as commodity prices.

Equity prices are prices of companies in the market and since the Fed promises to wipe out debt with inflation, the companies also 'gain' from this action, because they are holders of debt as well. However the real rise in equity prices is simply a function of the open-ended fiat currency supply in the market.

This action does show that the Federal Reserve chairman, Ben Bernanke is voting for Obama in these coming elections. Obviously Bernanke doesn't want to go back to a teaching position some place nowhere in Princeton, he wants to stay in power, he enjoys it, and thus he is helping the sitting president (as every Fed chairman has done before) to get re-elected by providing a short term fix to the long term problem and thus making the long term problem much graver, the consequences of an open-ended monetary expansion is inflation and potential hyper inflation and destruction of the currency. For obvious reason a destroyed currency does not help the economy.

Most of the so called 'economists' that are really government mouth pieces, are calling for more of this type of action, some are even saying that the Fed is doing today what it should have done back in the thirties 'to prevent depression'. Of-course these are witch doctors, in the late twenties and all the way through the thirties (except a short period of time) and through the forties and so on, the Federal reserve has been in the market, propping up bond prices, forcing interest rates lower.

The politicians and 'economists' and various pundits are talking about the coming 'Fiscal Cliff' as if that is the actual problem that the USA economy is facing. It's not a problem, it's part of a solution, which will be avoided. They are all very conveniently forgetting that this so called 'Fiscal Cliff' situation was a response by the government promising to cut spending, a response to a rating agency promising not to lower the rating of the USA sovereign debt.

The real problem for USA is not cutting spending it's the opposite. The real problem for the US (and other countries) economy is to continue spending, to continue government programs that cannot be paid for, to continue printing currencies, to continue expanding government powers, to continue destroying savings, to continue trying to push interest rates down.

Of-course the bond market today has responded in a logical manner, surprisingly enough, given how it responded previously. The prices for bonds are falling, so the interest rates on bonds are going up. Eventually this process will become unstoppable, just like the resolve of the Fed and US government (and all other governments and central banks in the world) to destroy the value of their money.

The solution for the people is not to follow their governments off this real cliff, the fake money cliff, which ends up being the economic cliff. The solution is to avoid fiat currencies of the world altogether. In fact anything except for currencies and various debt instruments is a valid way to avoid inflation, some things are better than others (precious metals, other commodities, farming), some are not as good (various non-farming and non-mining and non-financial equities, properties), but these are completely the wrong way to go: currencies, government bonds, financial equities.

Obama is going to be re-elected, so people like this are going to continue setting the policies and for those who don't have much in terms of savings it is going to become a serious problem. Maybe investing in a small piece of farming land is not such a bad idea, for those who can't do it on their own, maybe it makes sense to stock up on various non-perishable goods. The prices are going up and will go up further, again, not because of any speculation or even bad weather and droughts, it's very specifically tied to the inflation that all the governments are involved in at this point.

User Journal

Journal Journal: ACA ruling by the SCOTUS 46

The SCOTUS passed its ruling on the ACA and a large number of people are confused about parts of it, what is really in it substantively one way or another?

Is the ACA mandate really Constitutional? Well, 5 out of 4 justices said that it is, of-course it would be a bad outcome if such a close call was made upon a case deciding whether it is Constitutional for the government to execute people without a trial on a hunch of a president, but that can never happen, or ?

There are many interesting questions raised about ACA, but one is particularly intriguing, how is the mandate to buy insurance from a private company or face a penalty (tax under the SCOTUS ruling) Constitutional?

Also how is ACA Constitutional at all, given that this is a Senate bill and it did not originate in Congress as all bills are supposed to? Well, let's just leave that for later.

So let's examine the interesting points of the ruling:

1. The majority opinion is that the mandate is only Constitutional as a tax. The reason for this is that as a fine, this is unconstitutional, because it is an admission of an attempt to legislate by punitive taxation. The other reason is that the opinion also states that the government cannot use the commerce clause to force people to buy something that they are not buying otherwise. Now, there is a legal precedent for an opposite ruling actually, AFAIC regardless of what SCOTUS said in Wickard v. Filburn, that ruling was wrong and allowing the government to force a farmer to buy wheat when he is not interested in buying it is unconstitutional. But then again, so many people are excited about the ruling of 4 to 5 justices this way, though it clearly could have gone the opposite direction. The question of-course is: should there be so much room given to the SCOTUS justices to maneuver that they could rule one way or another basically on a whim and also because of public pressure? Does this really defend the Constitution or does it actually do something completely opposite?

2. The majority opinion is that this tax is only Constitutional because it is a small tax and ACA does not give authority to the IRS to enforce it by force (garnishing wages or imprisonment). The reason for this is that if the tax was punitive, then the SCOTUS would have to declare it unconstitutional, because it would mean that the government is trying to legislate by taxation what it cannot legislate directly, and this cannot be done. There are plenty of precedents as to why this is illegal, a simple example is prohibition that required an amendment to be passed to the Constitution. Passing an amendment is much more difficult than raising a tax, but still to stop people from consuming alcohol the government could not simply pass a 1,000,000 dollar tax upon sale of a bottle of booze, because this would clearly be a way to prevent people from drinking, which is a legislative move, but to do it with taxes. Taxing is not supposed to be replacement for legislation, and that is why it is very important to understand, that Roberts wrote that the mandate stands as is because the tax (fine) is very low and doesn't actually force anybody to buy insurance.

This means that in principle if the tax (fine) is raised from its current level (and it will have to be raised, otherwise ACA is completely unworkable, everybody who has to pay for insurance under the ACA will cancel insurance and only 'buy' it when they absolutely need to and then cancel again, once done with the bills) so if the tax is raised, the mandate becomes immediately unconstitutional and ACA has to go back to the supreme court!

Of-course in practice it's not going to happen, the lower courts will misinterpret what this is and will rule that raising the tax is constitutional and the SCOTUS will deny hearing it again, so in practice this doesn't matter anymore, they found a loophole to pass ACA and now they won't bother with what they have to do technically to keep it legal, just like how they implemented the income tax (which is still illegal today, it is only legal as a tax on corporate profits, not an 'income' tax and not a personal tax).

3. Majority opinion stated that the mandate tax (fine) is not a direct tax based on a completely faulty notion that it only applies to a small number of people who are currently uninsured and will not buy insurance in the future. This is wrong on many points. First, direct tax means a tax that is forced upon a person directly and that person pays directly to the government. The direct tax must be apportioned to be legal though, that's why Roberts said that this tax is not direct, which makes it something else - excise tax or a duty or import. It's not a duty or import, so it's an excise. But how can this tax be an excise, like a sales tax, if the person who is forced to pay it, is only forced because he is not participating in commerce, he is not buying something (insurance)?

There is a contradiction in the ruling that is glaring, it is amazing people are not seeing it: the SCOTUS found that the commerce clause doesn't apply to make mandate legal, but simultaneously the majority opinion stated that the mandate tax (fine) is not a direct tax, while stating that the commerce clause doesn't apply. Either the commerce clause applies, and thus the excise tax can apply or the commerce clause does not apply, but that means that no excise tax can be levied.

Either it's commerce or it is not commerce, and if it is not commerce, then commerce tax cannot apply, and excise is a commerce tax - tax on the act of buying (well, in this case not buying) something.

--

It is likely that there will be a situation at some point, when a person will not buy insurance and will be fined under the ACA and will take this to court. Assuming that the lower court would understand what is written in the SCOTUS decision, and assuming that the lower court would care, would want to go after the truth of the matter, this can in principle end up back before SCOTUS (if SCOTUS decides to hear it again, which is probably unlikely).

But if this happens, then the defence must bring forward this argument as well:

The mandate tax (fine) is unconstitutional because it is not a direct apportioned tax, it is not a uniform excise tax and it is not an income tax (an income tax, which is by the way only Constitutional as an unapportioned excise tax on corporate profits, you can read further for the explanation of that.)

These are taxes that can be levied by the US federal government legally:

1. Direct apportioned taxes, capitation and other direct apportioned taxes tax (a tax that applies to a person directly but is apportioned to the States). This means that if the federal government wants to raise taxes, it has to say by how much and it has to then use census data and depending on the populations of different States, apportion them their share. So if California has 12% of population, it would be responsible for 12% of this tax increase. Direct apportioned taxes were introduced by the founders this way in order to try and prevent 2 things:
    a. Fraud in census data, that's because a State could overstate its population to send more Congressmen, Senators to the Washington.
    b. US founders did not like direct taxes, they added that direct taxes had to be apportioned specifically so that poorer States would not always vote for tax increases. If the direct tax is not apportioned, then poorer States would always vote to increse taxes upon richer States, creating wealth redistribution and incentives to increase taxes on the rich (exactly the rhetoric by the government nowadays, that is so much supported by the poorer people). Apportioning direct taxes prevents this problem, because then direct taxes would have to be paid by poorer and wealthier states only depending on the size of their population.

2. Uniform excise taxes. These are indirect, so they can be collected from a person not directly, but through a merchant for example, such as sales taxes. Uniformity requirement means that there should not be special dealings when introducing them, people shouldn't be forced to pay different sales tax depending on their location or religion or race or whatever.

3. The 16th amendment allows for an income tax. This is a special situation, probably 99.9999% of people misunderstand what this is.

Initially the tax was introduced as an indirect tax, but SCOTUS saw through that argument and did not buy it. That's because the government made this argument: this is not a direct tax on people, it is a tax on people's income! In case of rental income, putting a tax on it is equivalent to putting a tax on property, so taxing rent is taxing its source - land and then it's a direct tax on the land owner.

In 1913 the new legislation appeared that stated that any income from any source can be taxed without apportionment. The 1916 Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916) court case stated that income can be taxed without apportionment. BUT this case does NOT state that income can be taxed directly, so from that case, the income tax is an unapportioned indirect excise tax.

In Brushaber the SCOTUS stated that in order to tax income, the income must be separated from its source, because it cannot be a direct tax, because it is unapportioned. So a rent income is not under this decision, because rent is tied to land and to the owner of the land.

Later SCOTUS decisions explained that separating income from source can be done with a corporate balance sheet, which means that the 16th amendment income tax is in reality a corporate profit tax. There is no legal, Constitutional personal income tax, people do not have profit, only corporations do. Profits are all expenses subtracted from all incomes, that's what can be taxed.

This actually is interesting from another perspective, so many people are upset about so called 'loopholes' that corporations have in order to lower their income taxes, but of-course all these so called 'loopholes' have to do with the fact that corporation has so many expenses, and government tries to reclassify various expenses in a way that would prevent them from being subtracted from incomes for the purposes of tax accounting. There is the entire notion of 'capital depreciation' (and the entire false 'scandal' about the 'corporate jets', which depreciate in 5 years instead of 7 years for commercial airliners). But this is total nonsense, as corporation has to buy the equipment and pay for it right away, but it is prevented from subtracting its expense from its income the year it bought the equipment, which often turns the situation into an impossible one, where a company with no profits is forced to take loans to pay income taxes!

So again, the income tax is not an income tax, it is only Constitutional as an excise tax on corporate profits. But this means that the current practice that IRS is involved in - collecting DIRECT UNAPPORTIONED taxes upon PEOPLE'S INCOME is completely unconstitutional, it is precisely the opposite in every way of what was declared as Constitutional by the Supreme Court of USA.

Given this history of behaviour of US government, it is very obvious that since ACA passed with a very narrow definition of how it is Constitutional, in the future of-course it will be enforced in a completely unconstitutional manner.

The tax (fine) will be raised, because people who do pay for their insurance today will stop paying, because this tax (fine) is so low today compared to the insurance plan payments. There will be some people who will be subsidised under the plan and will not have to pay for insurance, so they will 'buy' their plans with the subsidies. Also the people who actually need insurance to pay them right now, because they are sick, they will obviously 'buy' into insurance, since they cannot be denied due to the pre-existing conditions.

But this means that huge number of people will drop out of insurance, and the only people in it will be a minority of those who didn't have it until now and those who need insurance to pay for their treatment.

Under this scenario, the insurance companies will cease to operate. But of-course what is likely to happen is that the government will bail out the insurance companies with tax (and borrowed and printed) money. In the short term the government may even have an influx of cash because taxes (fines) will be collected from people who had private insurance prior to ACA but would cancel it now and just pay the tax (fine). But in the long run this means that insurance will become extremely expensive because of lack of payers and the government will be bailing out insurance with tax money at the new expensive rates.

So in conclusion, as always is the case, the name of the bill that came out of the government should be fully reversed by 180 degrees in order to understand the real consequences of this legislation.

This is not an 'Affordable Care Act', this is the exact opposite: the Unaffordable Care Act, because if people thought their premiums were going up quickly before ACA, they will be surprised just how good they used to have it.

---
PS:
note that Robert's decision that the mandate tax (fine) is indirect based on the idea that only a small part of the population will pay it faulty in another manner.

For a direct tax to be direct it is unnecessary that 100% of population pays it! People can be exempt from taxes and this means that no tax is paid by 100% of population (this never happens anyway), and thus the logic that the mandate is not a direct tax is faulty, but it can be understood why Roberts declared that, because if he had to admit that the tax is direct, it would immediately be unconstitutional, because it is unapportioned!

---
PPS:
It should be noticed that ACA has various implications to the economy that are not fully appreciated by the businesses yet.

There will be a strong pressure upon the businesses to downsize the workforce, to make sure they do not have over 50 employees. Of-course companies will be dropping insurance coverage, so this is good news if taken out of the context of ACA, because it will provide some boost to people's incomes, as they will have a little more money in their pocket temporarily, that's because as employers will drop coverage, they will have to increase the salaries of their employees by some amount (also this depends if there are any penalties associated with not covering employees under the new ACA plan, because before ACA there were penalties to the employer).

But eventually as companies downsize there will be more unemployment and at the same time the insurance companies will be under pressure because they will lose so many current clients as people and companies cancel their insurance plans plans (it's a 'free ride' with no pre-existing conditions).

Eventually this will lead to a serious problem just because of ACA alone. The large firms that cannot downsize under 50 people quickly will be hit with extremely high insurance premiums all of a sudden, that so many people will cancel insurance and the rates will have to skyrocket.

The large companies will be in a pickle, this WILL mean more outsourcing and more firing and no hiring by large companies at all (and by companies that are at the 50 people threshold).
---

User Journal

Journal Journal: Past comments, because there are many. 9

Supreme Court: Affordable Care Act Is Constitutional - insurance is no longer insurance, stop paying for it, suckers, it'll save you money to cancel and get it when you need it - no pre-existing conditions now.

Are Patent Wars Worth the Price Tag? - patents and drug research

Bill Gates Says Tablets Aren't Much Help In Education - on businesses contributing to society

High-Frequency Traders Are the Ultimate Hackers, Says Mark Cuban - free markets, some silly notions of 'gaming the system'.

Silicon Valley Values Shift To Customersploitation - FB IPO

Pirate Bay Founder Fined For 'Continued Involvement' - fuck the copyright and patent laws.

Senator Pushes For Tougher H-1B Enforcement There is no such thing as a 'wage slave'. Everybody is free to attempt their own business or live on charity.

Businesses

Journal Journal: Rhode Island's "Kingdoms of Amular" 5

There's some ugly drama surrounding the collapse of 38 Studios. That has caused baseball's Curt Schilling to walk away from video games and publicly state that it will end up costing him his fortune. Everyone is in a very bad position right now. 38 Studio's top creditor is the state of Rhode Island. Aside from some stranger assets, there is a partially finished MMO called Project Copernicus as well as the source code and artwork for Kingdoms of Amular. So why doesn't Rhode Island seize this source code and artwork? They could auction it or, better yet, give it to the people who paid for it.

Now we all know this isn't going to happen. The source code will be shelved and it is unlikely it ever contribute to society ever again. The people who coded it have been fired and have moved on to the next thing in their lives while the bankruptcy proceedings play out in the news. But if I fail to repay a loan on a car, repossession services come to take the car. If a studio gets $75 million from a state to make a video game, where are the state's repo men to reclaim the video game?

The current situation is unavoidably bad for everyone involved. Schilling is blaming the governor, developers are moving for the second time in two years, gamers are missing out on the sequel to Amular and money is missing everywhere. But most notably each resident of Rhode Island has paid $75 to the video game industry and will likely never see it returned to their pockets. A coworker who thoroughly enjoys the game said that it's RI's fault for investing in such a fickle and risky industry. Maybe he's right? But the game is reasonably entertaining.

So what could a state do with source code and artwork? The obvious thought would be to auction it off and recoup losses. But what company wants to buy up those assets for more than a pittance compared to the loan? The game didn't sell as well as they thought it would, your developers would have to learn thousands of lines of new code, the artists that could expand the art in the same style are thrown to the wind and there's already a polished title out there. To me, the obvious solution would be to instead package Amular and Copernicus (at least the PC versions) as learning software for high schools and universities in RI. Art students could work on reskinning it, developers could work on just getting it built and Rhode Island would at least be able to show its residents something for which they had paid.

Furthermore if RI really wanted to recoup its losses, they could likely make several million back with a Kickstarter project to open source everything from 38 Studios. The only people who might not like this idea are those in the games industry who claim the MMO and RPG markets are already thoroughly saturated. Perhaps the current publisher and those with distribution contracts of Amular would object. But those executives have already taken the citizens of RI and Curt Schilling for a ride so why should RI care? The only downside would be a massive influx of Amular clones on the PSN, XBLA and PC fronts. But this is an opportunity for gamers, Rhode Islanders and open source in general to expand and set precedence that when a company folds all that hard work and late nights with Mountain Dew and pizza should not be wasted and shelved.

You can tell me that this will never happen -- not with Amular, Copernicus or any of the thousands of titles from failed development studios -- because you're right. It hasn't ever happened and it most likely will not. But Rhode Islanders paid for these titles and the repo men should arrive and bring that back for Rhode Island to decide what to do with it. At least those that have paid for it should be able to decide if what their hard earned money paid for should sit collecting dust or live in immortality.
User Journal

Journal Journal: Sweden - more austere than most, more free market than many 2

It's going to be harder for Keynesians to use Sweden as an example of a country that is a socialist utopia, now that it is more austere than most and more free market oriented than many. Of-course Scandinavia has been moving in the free market, private enterprise direction for about 20 years now, so the arguments were wrong for 20 years at least, which didn't stop some from making them, but now there is even a better way to shut them up.

User Journal

Journal Journal: Of the Special Interests, by the Special Interests, for the Special Interests 2

"It is often that stories appear on /. about the various machinations of various government agencies and special interests that revolve around them to buy them, we are always on the receiving end of these collusions, be it ACTA, CISPA, the Patriot Act, NDAA, anything really.

If you ever wondered what it may look like when a non-special interest person makes it to one of the Congressional hearings in order to present the other side of the story, in order to give perspective of the tax payers, of a general member of public, then here is an example of what it looks like.

Peter Schiff was invited to this Congressional hearing (this is his second, his first one was a last year). He went to the hearing as a private individual, a person who has predicted the stock market crash of the late nineties, the housing bubble crash of 2008 and now is explaining why the USA is on a path towards the biggest bubble crash â" US dollar and bond crash, and the predictions are made simply by observing the fact that the government always ends up catering to the special interests, including political interests, which can never take the real corrective approach to the economy, which would require ditching the policy of controlling the interest rates on money, counterfeiting money (credit) by the Federal reserve, regulating the industries in a way that helps special interests in the first place.

In the room with him in this Congressional hearing were some of the people, to whom he gave speeches in 2005 and 2006 about the coming housing bubble collapse â" representatives of the mortgage bankers association.

You will notice that during the Congressional hearing, these special interests are treated as if they are impartial witnesses, while Schiff is mostly disregarded, of-course he does not represent a special interest in that room except that of a tax payer, so it is obvious he has no government solution to offer to the Congress.

Regardless of your point of view on the matter of FHA, it is an interesting review of what it looks like when special interests and the government get together and decide how to spend your tax money.

User Journal

Journal Journal: Free Market Anarchist Entrepreneur Forces USPS to Fail 4

Ok, so it is not a news story, it is not a new story either, but it is something to consider given all of the claims that USPS is so efficient and provides the cheapest service that free market cannot provide.

USPS did have that challenge and USPS failed in it and it turned to government in order to drive the challenger out of the market with lawsuits and pro-government monopoly laws. The challenge came in a form of an Anarchist, Lysander Spooner, who started his own post mailing business back in January 11, 1844. The name of the business was Lysander Spooner's American Letter Mail Company.

The USPS in fact engaged in behaviour, that many anti-free marketers assign to private businesses.

Hoping to drive Spooner out of business without raising any constitutional questions, the Postmaster General resorted to some extra-legal measures. Transport companies were told that they would lose their government contracts unless they stopped carrying American Letter Mail Company mail.

What is interesting is that the USPS postage prices were set by the Congress, not by market forces, and so it took Congress to cut USPS prices in near half, from 25 cents for a single sheet of paper as one of the responses to Lysander Spooner entering that market and providing the same service at lower prices. By cutting the USPS prices in half, Congress forced Spooner out of the business.

As a consequence of lower prices, USPS business rose significantly and rates were reduced again in 1851, which shows by the way, that an economy of scale makes more profit from higher volume even if this volume increase comes as a consequence of lowering prices.

This is another example of how it is the government, that creates monopolies and private sector that produces better products at cheaper rates. Of-course the government monopolies eventually fail as the entire underlying system becomes corrupt and can no longer sustain the costs associated with running subsidised monopolies.

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