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Govt vs. Innovation.

A few years ago author Jonah Goldberg wrote, “The notion that big business and big government are at war with one another is one of the great enduring myths of the 20th century.” It is a frequent theme in his writings. But it’s a difficult message to get across, to get people to unlearn the “trustbusting” fable they’re taught so young in life. When you read the evidence and history of it, and see the real examples of it today, it makes sense: what big industries fear the most isn’t government or regulation, but competition. It’s not universal, of course. Sure the general feel from the insurance industry is opposing Obamacare, but your biggest companies, like a Humana or a United Healthcare, will be able to absorb the costs — in large part by passing them onto you, the consumer — while the smaller companies will either close up shop or seek to be acquired by a bigger company. There’s a reason why General Electric, which owns NBC, which you’re reminded of during the “green logo” week, had for so long injected itself into the politics of global warming — oh, excuse me frozen northeast, climate change — it’s GE that’s manufacturing those ridiculously expensive light bulbs (the ones that can give you horrible mercury poisoning).

Goldberg saw it thus:

“Big Steel actually sought out government regulation because it feared free-market competition. During the New Deal, FDR supposedly carried on his (distant) cousin Teddy’s crusade against the “malefactors of great wealth.” But the truth is that big business often welcomed government regulation. Clarence Darrow, surveying the National Recovery Act’s record, found that the keystone agency of the New Deal had served only to help big business.

What progressives, then and now, always fail to recognize is that the more government meddles in business, the more business meddles in government. The left thinks the rational response to the bear hug that business has around government is to hug back twice as hard. The real answer is to let go, let companies sink or swim. Don’t render them “too big to fail” because they provide health care or other benefits.

All of these people who want to “crack down” on big business are simply inviting companies into the tent, giving them incentives to buy politicians, votes and policies.”

Here’s a more recent example of an entire industry happily getting into bed with the government in order to destroy an up and coming business model that threatens its bottom line (from the WSJ):

“In a recent New York Times NYT opinion article, New York Attorney General Eric Schneiderman acknowledged that technology moves at a faster pace than laws can keep up. But instead of waiting to see if new rules are needed, he argues: “The only question is how long it will take for these cyber cowboys to realize that working with the sheriffs is both good business and the right thing to do.”

Mr. Schneiderman has targeted Airbnb, an online service that lets users easily rent homes or apartments for short-term stays, giving travelers a new option. The hotel industry, concerned about being disrupted, is lobbying hard to kill the upstart. Mr. Schneiderman went to court demanding the names of people who rent out their homes to see if they violate any laws. Airbnb objects to this fishing expedition. With a valuation in the billions, the Silicon Valley company can afford lawyers to protect its customers, but costly regulatory overreach will inevitably suppress new startups from trying to compete.

Like Airbnb, mobile-phone app Uber creates a marketplace directly linking buyers and sellers—in its case, passengers and drivers—outside the ornate regulations of analog-era municipal taxi commissions. Brussels, Seattle and Miami have banned or strictly limited Uber cars. New York’s Mr. Schneiderman objects to the company’s practice of pricing more when demand is heavy. The alternative is severely restricted supply, as anyone knows who has tried to hail a cab in the rain.

The drone industry in the U.S. has been grounded because the Federal Aviation Administration has banned commercial use of drones pending new regulations. Meanwhile, countries such as Canada and Australia encourage drones. “As American regulators struggle to come up with a rulebook for the fast-moving industry,” Toronto’s Globe and Mail bragged recently, “Canada has emerged as perhaps the center of commercial drone technology—from Ontario farmlands to Alberta’s oil sands.”

Other examples include the Food and Drug Administration’s scrutiny of 23andMe’s marketing, which forced the company to stop offering health data from its at-home $99 genetics-analysis kit, and prohibitions against selling self-driving cars, which have left the U.S. in the dust behind less regulated Europe.”

Note the pompousness of Attorney General Eric Schneiderman. Anyone who dares not succumb to the will of almighty government and outdated business models are “outlaws.” Amazing. While the Internet was for its first decade the last bastion of a true free market — free from government intrusion prematurely stifling innovation — those days are ending quickly. That’s a bad thing.

Who’s Tom Steyer?

If you don’t know Tom Steyer and his brother are the liberal equivalent of the Koch brothers, but of course since they’re liberal other liberals, including Democrats in office and media lackeys, have no problem with Tom Steyer and his big money, his corporate interests, and his politics, unlike what they have with, say, the Koch brothers. Remember that hypocrisy isn’t hypocrisy if it’s performed by a liberal who’s being a hypocrite for a “good cause,” such as a cause that a champions the values of liberalism. Got that?

Steyer has pledge donations of $100 million in political contributions to candidates who oppose the Keystone XL project. Even though climate change and the environment recently Gallop polled almost dead last in a list of the country’s top 15 priorities (13th and 14th, respectively), it was enough to get Hillary Clinton’s attention, as writer Jim Geraghty pointed out. Suddenly Ms. Clinton is touting the environment and opposing Keystone as one of her most pressing issues. But of course!

Anyway, the context of this post is to share Powerline blog’s research that decimated an attempt by Washington Post writers to directly link the Koch brothers to Keystone. You should read the whole thing for the anatomy of a great retort, but here’s a great excerpt:

Let me offer an alternative explanation of why the Washington Post published their Keystone/Koch smear: 1) The Washington Post in general, and Mufson and Eilperin in particular, are agents of the Left, the environmental movement and the Democratic Party. 2) The Keystone Pipeline is a problem for the Democratic Party because 60% of voters want the pipeline built, while the party’s left-wing base insists that it not be approved. 3) The Keystone Pipeline is popular because it would broadly benefit the American people by creating large numbers of jobs, making gasoline more plentiful and bringing down the cost of energy. 4) Therefore, the Democratic Party tries to distract from the real issues surrounding the pipeline by claiming, falsely, that its proponents are merely tools of the billionaire Koch brothers–who, in fact, have nothing to do with Keystone one way or the other. 5) The Post published its article to assist the Democratic Party with its anti-Keystone talking points.

Which frames a very interesting contrast. The Keystone Pipeline is by no means the only energy-related controversy these days. “Green” energy is also highly controversial. “Green” energy is controversial, in part, because, unlike the Keystone Pipeline, it harms the consumer: solar and wind energy are inefficient, and therefore raise energy costs to consumers. “Green” energy is also controversial because it harms taxpayers: because they are inefficient, solar and wind energy can survive only through taxpayer-funded subsidies. Further, the federal government has invested in numerous “green” energy projects that have gone bankrupt, sticking taxpayers with the tab. Solyndra is only one of a number of such debacles.

“Green” energy is also controversial because it has been used to enrich government cronies. Let’s take, for instance, the billionaire Tom Steyer. Steyer has made much of his fortune by using his government connections to secure support for uneconomic “green” energy projects that have profited him, to the detriment of consumers and taxpayers. See, for example, here, here, here, here, here, here and here. As is explained here, Tom Steyer is a bitter opponent of the Keystone Pipeline. His financial interests, in “green” energy and perhaps also in pre-pipeline oil sources like BP, stand to benefit if Keystone is killed.

Haven’t heard much about Tom Steyer, you say? Maybe that’s because he isn’t heavily involved in politics. Heh–just kidding. Steyer, as you probably know, is one of the biggest donors to the Democratic Party and its candidates. This year, he has pledged to contribute $100 million to the campaigns of Democratic candidates, as long as they toe the line on environmental issues–which includes, presumably, taxpayer support for “green” energy and opposition to Keystone.

So the Post could have written a very different story about the Keystone Pipeline. The Post could have written that opposition to the pipeline is being funded in large part by a billionaire who has a personal financial interest in the pipeline not being built. And that’s not all! The billionaire is a political crony who has used his connections in Washington to get rich and to fleece consumers and taxpayers. Now, with Keystone, he is doing it again! How is that for a story that would “stir and inflame public debate in this election year”?

The Post, of course, didn’t write that story.

Putin’s Apologists

I had no idea such a ridiculous movement of Russian apologists had reformed, but I suppose Vladimir Putin has his “useful idiots” as much as Stalin or Lenin did. Here’s the commentary by Bret Stephens.

Russia is a big country. In case you didn’t know.

A flight from New York to St. Petersburg will cover the same distance as one from St. Petersburg to Vladivostok. There are 22 Russians for every Russian square mile, a population density only slightly exceeded by Mali. Exclude all of Russia east of the Urals, and the European portion of the country is still about the size of India and Turkey put together.

This is not exactly a state needing greater Lebensraum.

The point needs making in the face of an undercurrent of Western apology for Vladimir Putin‘s seizure of Crimea. It’s an argument that goes roughly as follows:

• Yes, Russia’s seizure of the peninsula was provocative and illegal. But look at it from Moscow’s point of view. “To Russia,” writes Henry Kissinger in the Washington Post, “Ukraine can never be just a foreign country.” Defining events in Russian history—Mr. Kissinger cites the 1709 battle of Poltava—took place on (current) Ukrainian soil, and Ukraine has been independent for just 23 years. Crimea itself is ethnically Russian and only passed into Ukrainian hands through a Soviet bureaucratic maneuver in the mid-1950s.

• As for provocation, how could any Russian leader be indifferent to a Ukraine that sought to join NATO or the European Union, much less sit still as demonstrators in Kiev paralyzed the country and brought about the downfall of its democratically elected leader?

In this reading, the West’s post-Cold War policies toward Russia have been a complex of patronizing lectures about democracy and good governance alongside a string of geopolitical humiliations, above all the expansion of NATO to former Warsaw Pact countries.

• Also, isn’t it hypocrisy for Washington to protest Russia’s occupation of foreign soil? “As ambassador, I found it difficult to defend our commitment to sovereignty and international law when asked by Russians, ‘What about Iraq?’ ” writes Mike McFaul, until recently the administration’s envoy to Moscow, in Monday’s New York Times.

• Finally, isn’t Mr. Putin merely duplicating the tough-guy tactics conservatives favor when it comes to the pursuit of American interests? “For Putin, an anti-Russian government in Kiev is illegitimate regardless of how it takes power,” writes Peter Beinart. “For many American hawks, the same is now true for a pro-Chávez government in Latin America or an Islamist government in the Middle East.” Mr. Beinart calls Mr. Putin a “Russian Neocon.”

Thus does cold-blooded foreign policy “realism” blend with the embarrassed apologetics of postmodern liberalism to become the enabler of Russian revanchism.

Let’s get a few things straight.

(1) NATO is a defensive alliance. As the Kremlin well knows, despite its propaganda and paranoia. The notion that the West provoked Russia by expanding NATO ignores why Poland, the Baltic states and other new members wanted to join NATO in the first place. Russia, threatened only by its internal discontents, does not need Ukraine as a territorial buffer against the Wehrmacht.

(2) A historic claim is not a valid claim. Much of modern-day Ukraine was Polish until September 1939. Yet Poland does treat Ukraine as “just a foreign country.” To invoke history as a way of rationalizing Mr. Putin’s moves in Crimea allows him to manipulate history. It strengthens his interests at the expense of the interests, and history, of others.

(3) Ethnic claims aren’t valid claims, either. Especially when there is no evidence of ethnically motivated harms. Especially, too, when the non-Russian minority amounts to a non-trivial 40%. Especially, three, when the referendum used ex post facto to justify the seizure of Crimea yielded the kind of lopsided vote—a Stalinist 97%—that can only be achieved by fraud and intimidation, further undermining the validity of the ethnic claim. Especially, four, when Russia’s ethnic claim to Crimea opens a global Pandora’s box.

(4) Russia was not humiliated by the end of the Cold War. Even if Mr. Putin and his colleagues in the KGB were. Humiliation is what Germany imposed on Russia at Brest-Litovsk, and what France imposed on Germany at Versailles. In reality, Russia was saved by the end of the Cold War and a postwar settlement that provided lavish foreign aid and went out of its way to integrate Russia into the global economy, the G-8 and even NATO itself.

(5) Crimea is not Iraq. And Amb. McFaul’s suggestion that the two are even remotely comparable is both insipid and outrageous. In Iraq, the U.S. deposed a tyrant who had spent the previous decade defying international law. We then did our imperfect best to stand up a representative government while fighting an insurgency consisting of al Qaeda, Baathist holdouts, and proxies of Iran. Then we got out. How, again, is this like Crimea?

(6) Neocons typically want to promote liberal democracy. And stand up to the enemies of liberal democracy. That’s why this column has been calling for Russia to be kicked out of the G-8 since 2006, two years before liberals started clinking glasses to the “reset” and nearly eight years before Mr. Obama finally took my good advice.

Our new Kremlinogists now tell us that Mr. Putin’s gambits need to be understood in the context of Russia’s historic foreign policy objectives. True up to a point. But Mr. Putin is also pursuing his own interests as ringleader in a corrupt oligarchy sitting on the economic time bomb that is a commodities-based economy. The best U.S. policy will seek to light the shortest fuse on that bomb, strengthen our allies, and contain the fallout.

Good solutions to Russia which Obama won’t do.

Steve LeVine from has one interesting suggestion for combating Russia’s thuggery.

As of now, Putin is profiting from his invasion. That is because oil prices are up on the risk of a supply disruption. This enriches the Russian state budget, half of which is supported from oil and gas exports. But economist Philip Verleger notes that prices can go down as well as up, and he recommends inflicting pain by engineering the former.

The tool is the US Strategic Petroleum Reserve, the 700-million-barrel underground cache of crude oil waiting in Texas and Louisiana for a rainy day (see chart below). In an overnight note to clients, Verleger argues that if the US were to ship just 500,000 barrels a day of oil onto the market, it would drive down prices by about $10 a barrel and cost Russia about $40 billion in annual sales. The US could keep doing this for years, he says. “[Russia’s] GDP might drop 4%, which would certainly count as a ‘consequence,’” he says. Half would come from lower oil prices and half from gas sales, whose prices Russia indexes to oil.

This is a great suggestion on paper, but it would mean a president who isn’t beholden to the fringe environmental extremist who would be appalled at the notion of actually domestic increasing oil release and oil consumption. That’s sad, isn’t it — that Saudi Arabia would be more likely be a willing partner in such a plan — a plan I would add where the Saudis make less money — then Obama’s constituency?

The WSJ’s Holman Jenkins had some similar ideas — “Unleash Europe’s antitrust case against Gazprom,” “Embargo Gazprom LNG tankers (it recently bought its fifth) from Western ports,” “Withdraw Europe’s support for pipelines Mr. Putin wants to build,” “Get moving on the pending U.S. trans-Pacific and trans-Atlantic trade partnerships, which grant member countries automatic approval of U.S. liquefied gas exports,” “Let Exxon and other Western oil firms queuing up to explore Siberia and Russia’s Arctic know their efforts are not currently appreciated. A single caustic hearing on Capitol Hill should do it.”

All great ideas, but Jenkins is the first to acknowledge that Europe is so tied to Russian energy exports that they would be unlikely to rock that boat. But, once again, I would submit that as hard as those things would be, it’s nothing compared Obama, had he even the guts to try, and he doesn’t, convincing his the extreme environmentalists who helped elect him.

This is why Obama is so often compared to Jimmy Carter. You know he’s just out of his league on foreign policy. These ideas above are all possible, all tangible, and all non-violent. They are all things that have teeth beyond the useless U.N. resolution styled response to which the West is usually relegated. But these things require leadership. Not even Reaganesque leadership. Probably just Clintonian leadership would suffice. But Obama is just feckless and impotent.

King Obama’s Obamacare exemptions

Don’t like ObamaCare? Tough. Law of the land. Passed in both houses. Upheld by the Supreme Court. Isn’t that what we’ve all been told for years? “Shut up!” they explained. We know what’s good for you. Our legislative experts who admitted to not reading the 2,000-page bill prior to passing it arrogantly determined that they could force feed better healthcare decisions than do the 150 million collective American families.

But the thing is, it’s not really going as planned is it? Causing lots of bad press and presidential heartburn (I know! He should enroll in ObamaCare! Oh, what’s that? The president and our Congress have a different plan?) No worries. All those things they said previously — law of the land, both houses, Supreme Court, yadda yadda yadda — no longer apply, given that we don’t have a president so much as a king who can rule for two four-year terms. Call it a modern aristocracy, or certainly a oligarchy.

What other way to describe an executive that can just pick and choose which aspects of American law he wants to ignore? Last month David Harsanyi detailed all the ways our New Aristocrats have circumvented law.

According to the Congressional Research Service, the Obama administration has probably missed half of the deadlines of the Affordable Care Act. Here’s a list of 13 executive alterations Now, if all this haphazard implementation were only a matter of improving what are onerous and poorly written facets of Obamacare, that would be one thing. A bad thing, yes. But what makes this free-for-all an especially blatant abuse of power is that the delays are enacted almost exclusively for political reasons.

If some of your deep-pocketed cronies visit the White House, delay the law’s employer mandate. Why not? If the risible Medicare cuts you concoct to sell ACA to voters by keeping the price tag under a trillion dollars become distasteful to voters leading up to an election, just delay the cuts until you have a more advantageous environment.  If caps on out-of-pocket insurance costs haven’t panned out like you promised — delay for another year.  Small Business Health Options Program? Delay. Employee Auto-enrollment? Delay. Pre-existing conditions insurance sign-up? Delay.

The Obama administration is now giving medium-sized employers an extra year — until 2016 — before they must offer health insurance to their full-time workers. This directly contradicts the text of the law. Good for those employers; bad for the rule of law.

…  So, question: when was the last time policy was executed as chaotically and with such little regard for the law?  I don’t want to sound like a troglodyte, but the president, as head of the executive branch of the federal government is constitutionally obligated to “take care that the laws be faithfully executed,” not implement laws in an expedient manner, or a more prudent manner, or even in a way that he believes is more moral or a helpful for people struggling to find affordable health care. This is why we write bills down and debate them prior to passage. Or, at least, it used to be.

Indeed! But there’s no end in site — and that’s just ObamaCare. If a president can circumvent law for political cronies for one law, can’t he just do the same for any law, for any reason?

The Hill reports that this week the Obama Administration is once again delaying key provisions of the law for the sole purpose of surviving this November’s elections. No doubt all these provisions will be re-discovered (by Democrats and by the media both) once a Republican president comes to power. Until then, don’t mind their lack of outrage.

Now, of course, all these delays and exemptions are for key provisions of ObamaCare that conservative critics had long claimed would be detrimental to businesses. But, at the time of those complaints the Democrats had simply retorted with “Shut-up!-they-explained tactics and called their opponents hacks for the insurance industry. It seems King Obama is now in agreement with them.

[WSJ] Like the individual mandate, the employer decree [the delayed but required coverage for more than 50 employees] is central to ObamaCare’s claim of universal coverage, but employers said the new labor costs—and the onerous reporting and tax-enforcement rules—would damage job creation and the economy.

Liberals insisted that such arguments were false if not beneath contempt, but then all of a sudden the White House implicitly endorsed the other side. Now the new delay arrives amid a furious debate about jobs after a damning Congressional Budget Office report last week, only this time with liberals celebrating ObamaCare’s supposed benefits to the job market.

Well, which is it? Either ObamaCare is ushering in a worker’s paradise, in which case by the White House’s own logic exempting businesses from its ministrations is harming employees. Or else the mandate really is leading business to cut back on hiring, hours and shifting workers to part-time as the evidence in the real economy suggests.

But, you see, King Obama and his aristocratic friends are above the law. The laws only apply to buffoons like you and me, not them. That’s why, as the Washington Post recently reported, 12,359 Congressional representatives and staff members have warped a key provision of ObamaCare intended to cover small businesses.

“Normally, the small-business exchanges are reserved for companies with fewer than 50 employees (rising to 100 workers over the next two years). Some lawmakers have therefore questioned whether it’s fair to allow elected officials and their staffs to access the new online insurance marketplaces, which are expected to offer relatively low-cost plans, when private companies the size of Congress are excluded.

During a hearing last year on the rollout of the exchanges, for instance, Sen. David Vitter (R-La.) called the rule a “special carve-out for Congress” and argued he should not get “completely different and better treatment” than other Americans under the law.”

It’s far from over, too.

Megan McArdle from has listed all the potential expensive pitfalls for businesses between now and 2018. No doubt so long as we have an “Aristocratic Democracy” rather than a libertine constitutional democracy in charge all those things will be exempt too — well, so long as you’re one of their allies.

ObamaCare may cover, but it doesn’t treat.

Here’s yet another crushing story about how ObamaCare first took away a cancer victim’s working and effective insurance plan, and then removed her access to what was that patient’s most effective drug treatment, Sandostatin. It’s written by the son of the victim, Stephen Blackwood, who is president of a small liberal arts college. It also underscores the previous blatant lies of the administration — you’ll recall “if you like your current insurance you can keep it.” What’s the point of rhetorical and Utopian success, such as the promise to cover all Americans, when such catastrophic practical failures as not actually being treated abound? Congratulations, America, the Democrats’ attempt at socialized medicine is a reality. You are all now covered, albeit no longer treated.

And then in November, along with millions of other Americans, she lost her health insurance. She’d had a Blue Cross/Blue Shield plan for nearly 20 years. It was expensive, but given that it covered her very expensive treatment, it was a terrific plan. It gave her access to any specialist or surgeon, and to the Sandostatin and other medications that were keeping her alive.

And then, because our lawmakers and president thought they could do better, she had nothing. Her old plan, now considered illegal under the new health law, had been canceled.

Because the exchange website in her state (Virginia) was not working, she went directly to insurers’ websites and telephoned them, one by one, over dozens of hours. As a medical-office manager, she had decades of experience navigating the enormous problems of even our pre-ObamaCare system. But nothing could have prepared her for the bureaucratic morass she now had to traverse.

The repeated and prolonged phone waits were Sisyphean, the competence and customer service abysmal. When finally she found a plan that looked like it would cover her Sandostatin and other cancer treatments, she called the insurer, to confirm that it would do so. The enrollment agent said that after she met her deductible, all treatments and medications—including those for her cancer—would be covered at 100%. Because, however, the enrollment agents did not—unbelievable though this may seem—have access to the “coverage formularies” for the plans they were selling, they said the only way to find out in detail what was in the plan was to buy the plan. (Does that remind you of anyone?)

With no other options, she bought the plan and was approved on Nov. 22. Because by January the plan was still not showing up on her online Humana account, however, she repeatedly called to confirm that it was active. The agents told her not to worry, she was definitely covered.

Then on Feb. 12, just before going into (yet another) surgery, she was informed by Humana that it would not, in fact, cover her Sandostatin, or other cancer-related medications. The cost of the Sandostatin alone, since Jan. 1, was $14,000, and the company was refusing to pay.

The news was dumbfounding. This is a woman who had an affordable health plan that covered her condition. Our lawmakers weren’t happy with that because . . . they wanted plans that were affordable and covered her condition. So they gave her a new one. It doesn’t cover her condition and it’s completely unaffordable.

Though I’m no expert on ObamaCare (at 10,000 pages, who could be?), I understand that the intention—or at least the rhetorical justification—of this legislation was to provide coverage for those who didn’t have it. But there is something deeply and incontestably perverse about a law that so distorts and undermines the free activity of individuals that they can no longer buy and sell the goods and services that keep them alive. ObamaCare made my mother’s old plan illegal, and it forced her to buy a new plan that would accelerate her disease and death. She awaits an appeal with her insurer.

Will this injustice be remedied, for her and for millions of others? Or is my mother to die because she can no longer afford the treatment that keeps her alive?

Like every American, I want affordable health care, and I’m open to innovative solutions of all kinds—individual, corporate, for-profit, nonprofit and public. It will take all of these, and all the intelligence, creativity and self-discipline we have, as well as everything we can offer one another as families, neighbors, friends and citizens—and it still won’t be perfect. But it is precisely because health care for 300 million people is so complicated that it cannot be centrally managed.

The “Affordable” Care Act is a brutal, Procrustean disaster. In principle, it violates the irreducible particularity of human life, and in practice it will cause many individuals to suffer and die. We can do better, and we must.

Who’s the top 1%?

There was some interesting analysis done by the Manhattan Institute’s James Piereson last month regarding who is really in that vilified “Top 1%.” It’s based on 2010 tax data — the most completely analyzed tax data currently available. As we’re in an election year you’re sure to see Democrats use it once more given its success against Mitt Romney two years ago. While it’s an effective election strategy, its dictated intention of raising tax revenue is destined for disaster, says Piereson.

This crusade is based on three questionable claims. One is that the wealthy are mostly Wall Street bankers benefitting from rising stock and real estate prices, or executives who pay themselves extravagant salaries. Another claim is that such people unfairly benefit from a system that taxes capital gains at half the highest marginal rate paid by those who earn salaries and wages. Then there is the assertion that the “super rich” have abundant funds that can be taxed to improve the living standards of everyone else.

… In 2010, the latest year for which we have complete data, roughly 119 million households filed tax returns with the IRS, leaving about 1.1 million households in the top 1% of the income distribution. According to this data compiled by the Congressional Budget Office, the top 1% received 15% of the national household income (before taxes) in 2010, up from 9% in 1980. A taxpayer needed a taxable income of $307,000 to enter the top 1%, a figure that hardly qualifies as “rich” today, especially in cities like New York, Chicago, Los Angeles or San Francisco.

According to research on individual tax returns in 2004 and 2005 by Jon Bakija of Williams College, Adam Cole of the Treasury Department and Bradley T. Heim of Indiana University, the top 1% consists primarily of salaried executives at nonfinancial businesses (30%) and secondarily of doctors (14%), people working in finance (13%) and lawyers (8%). Among the “super rich” in the top 0.1% (about 110,000 households), the distribution still favors business executives (41%) over people in finance (18%).

Given these percentages, there were approximately 330,000 salaried non-financial executives in the top 1% and some 45,000 in the top 0.1%. These are numbers far too large to be accounted for by senior executives in the Fortune 500. The vast majority must have earned their salaries in small- and medium-size businesses—not in the largest firms and definitely not in finance.

The top 1%, and especially the top 0.1%, also includes a growing number of professional athletes who have joined a long list of actors and artistic performers such as Tiger Woods, Peyton Manning, LeBron James, Matt Damon, Julia Roberts, Taylor Swift, Bruce Springsteen and Beyoncé. All of them (according to Forbes magazine) earn in excess of $10 million a year, and often much more.

Scores of college football or basketball coaches, like Nick Saban and Mike Krzyzewski, earn annual salaries in excess of $2 million. According to Forbes, the average salary for players in the National Basketball Association is more than $5 million, in Major League Baseball more than $3 million, and in the National Football League more than $2 million. The minimum salary in all three leagues is sufficient to place every player in the top 1%.

All of these performers earn their incomes in highly competitive environments and through the voluntary patronage of consumers. Where does their money come from?

The top earners depend heavily on salaries. In 2010 the top 1% earned 36% of their incomes from salaries and wages (what the CBO calls labor income), 22% from businesses, farms and partnerships, and just 19% from capital gains. The majority of their income would thus be taxed today either at the corporate or the highest marginal rate rather than at the lower capital-gains rate of 23.8%.

Emanuel Saez of the University of California ( Berkeley ) has shown in a series of papers that, as he writes, “The top income earners today are not ‘rentiers’ deriving their incomes from past wealth but rather are the ‘working rich,’ highly paid employees or new entrepreneurs who have not yet accumulated fortunes comparable to those accumulated during the Gilded Age.”

The typical “rich” person today is someone who works for a salary and accumulates stocks and bonds through savings, retirement plans and (for business executives) stock options.

From 1980 to 2010, as the top 1% increased their share of total before-tax income to 15% from 9%, their share of the individual income tax soared to 39% of the total paid, up from 17%. Most were paying federal taxes at the highest marginal rate: In 1980 that rate was 70% and in 2010 it was 35.5%—but it has now climbed back to 39.6%. The share of federal taxes paid climbed dramatically in those 30 years even as marginal rates were cut almost in half.

According to the White House budget office, in 2010 the federal government raised approximately $900 billion from the individual income tax, of which about $350 billion (39%) was paid by the top 1% of income earners. The remainder of total federal tax collections (nearly $2.2 trillion in total) was paid through corporate, payroll, estate and excise taxes.

Those who want to “tax the rich” to redistribute income to the poor and middle class usually propose to raise the marginal rates on incomes or the capital-gains rate, or both. Yet as Scott Hodge recently documented in these pages, it will not be easy to raise vast sums this way.

The individual income tax accounts for slightly less than half of federal revenue and the top 1% already pays a substantial share of that total. Most of the wealth owned by the top 1%, and especially by the “super rich” in the top 0.1%, is also held in stocks, bonds and real estate that are not subject to income taxes until sold. It is a fool’s errand to try to raise the living standards of the bottom 60% through higher income taxes on the top 1% or 0.1%.

Snowden story has no good guy.

In a recent newsletter Jim Geraghty made some very good points regarding damaging leaks that Edwin Snowden has made that have nothing to do with being a “whistle blower” or acting in some kind of patriotic civil libertarian fashion. I’ve found myself waffling on Snowden, because he has at a minimum forced a discussion on civil liberties and definitely exposed outrages that should concern persons who believe in limited government powers. But it’s complicated too. Snowden is no doubt in this for his own gain and ego, and exposed facets and programs that will damage national security and traditional Constitutional war powers that are not included in protecting civil liberties.

The revelations about the NSA’s capabilities, yes, are applicable to discussions of domestic surveillance. But Snowden leaked a heck of a lot more information than that, and most of his defenders (and some of his detractors) focus on one portion of his leaks and avert their eyes from the rest.

The statement “a significant portion of Snowden’s leaks have nothing to do with domestic surveillance” is a controversial and outrageous statement among people who haven’t followed Snowden that closely, and/or don’t want to see the whole picture.

Here’s just a partial list of Snowden’s leaks that have little or nothing to do with domestic surveillance of Americans:

The classified portions of the U.S. intelligence budget, detailing how much we spend and where on efforts to spy on terror groups and foreign states, doesn’t deal with Americans’ privacy. This leak revealed the intelligence community’s self-assessment in 50 major areas of counterterrorism, and that “blank spots include questions about the security of Pakistan’s nuclear components when they are being transported, the capabilities of China’s next-generation fighter aircraft, and how Russia’s government leaders are likely to respond to ‘potentially destabilizing events in Moscow, such as large protests and terrorist attacks.'” The Pakistani, Chinese, and Russian intelligence agencies surely appreciate the status report.

Our cyber-warfare capabilities and targets don’t deal with Americans’ privacy. The revelation that the U.S. launched 231 cyber-attacks against  “top-priority targets, which former officials say includes adversaries such as Iran, Russia, China and North Korea and activities such as nuclear proliferation” in 2011 has nothing to do with Americans’ privacy.

The extent and methods of our spying on China have nothing to do with Americans’ privacy.

British surveillance of South African and Turkish diplomats has nothing to do with Americans’ privacy.

The NSA’s successful interceptions of communications of Russian President Dimitri Medvedev has nothing to do with Americans’ privacy. This is not a scandal; it is literally the NSA’s job, and now the Russians have a better idea of what messages were intercepted and when.

Revealing NSA intercepts and CIA stations in Latin America — again, nothing to do with U.S. citizens.

Revealing a U.K. secret internet-monitoring station in the Middle East — nothing to do with U.S. citizens.

The extent and range of NSA communications monitoring in India. . . .

The fact that the United States has “ramped up its surveillance of Pakistan’s nuclear arms,” has “previously undisclosed concerns about biological and chemical sites there,” and details of “efforts to assess the loyalties of counter­terrorism sources recruited by the CIA” . . .

The U.S.’s spying on Al-Jazeera’s internal communication system. . . .

What we know about al-Qaeda efforts to hack our drones. . . .

The NSA’s ability to intercept the e-mail of al-Qaeda operative Hassan Ghul. . . .

The NSA’s ability to read the e-mail of the Mexican president. . . .

The U.S.’s electronic intercepts of communications to French consulates and embassies in New York and Washington. . . .

The existence of NSA surveillance teams in 80 U.S. embassies around the globe . . .

NSA’s spying on OPEC . . .

NSA’s collecting data on the porn habits of Muslim extremist leaders in order to discredit them . . .

. . . none of these stories have much of a tie to Americans’ privacy.

The all-or-nothing terms of the Snowden discussion are persistent, baffling, and obscuring the truth. The NSA’s willingness to vacuum up and store the communications of ordinary Americans — with no tie to terror, crime, or foreign governments at all — obliterates any remaining meaning of the Fourth Amendment of the Constitution and deserves every bit of public outrage and rebuke. But that doesn’t necessarily mean Snowden is the good guy in the story. This story probably doesn’t have a good guy.

♫ Mister, we could use a man like Dwight D. Eisenhower again…♫

From Jonah Goldberg’s G-File letter:

“There is a lovely apocryphal story, generally told about Dwight D. Eisenhower during his time as president of Columbia University: The school was growing, necessitating an expansion of the campus, which produced a very hot dispute between two groups of planners and architects about where the sidewalks should go. One camp insisted that it was obvious — self-evident! — that the sidewalks had to be arranged thus, as any rational person could see, while the other camp argued for something very different, with the same appeals to obviously, self-evident, rational evidence. Legend has it that Eisenhower solved the problem by ordering that the sidewalks not be laid down at all for a year: The students would trample paths in the grass, and the builders would then pave over where the students were actually walking. Neither of the plans that had been advocated matched what the students actually did when left to their own devices. There are two radically different ways of looking at the world embedded in that story: Are our institutions here to tell us where to go, or are they here to help smooth the way for us as we pursue our own ends, going our own ways?”

Regarding that shutdown.

I’m late in any posting on this topic but the House GOP should have certainly expected the public to hold them far more accountable than Democrats or President Obama — I mean, that’s just one of the many big advantages in having an alphabet soup of television networks that carry water for your causes.

So while I completely agree with Andrew McCarthy that, Constitutionally speaking, the House has every right to not fund bills, and while I completely agree with “econlumnist” Thomas Sewell that the Democrats — not the Republicans — were actually the ones voting against funding the government, and while I perfectly sympathize with exasperated Tea Partiers, so tired of an administration that used the IRS to bully their right to speech, that said “Enough!” to our $17 trillion-and-counting debt (or $205 trillion apparently), they all had to just know that this thing would be spun as a loss for Republicans.

In the meantime they took the spotlight off of a bungling Obama Administration that can’t even get a website working (, let alone run one-seventh of the economy that is healthcare. Fortunately, with the shutdown behind us conservatives can go back to arguing the virtues of limited government, and frankly, the federal government’s incompetence is doing most of that job for them. Incompetence, unfortunately, for its citizens.

And, by the way, to date nobody has ever effectively retorted my number one issue with Obamacare — if it’s so damn good, then why isn’t our president, our senators, our representatives, and other elected officials, on it? Why do they actively oppose any effort to get themselves on it?

As close observers of history and human nature, James Madison and the other Founders of the U.S. Constitution knew that the equal and unbiased application of the law to all people, especially elected officials, is essential to freedom and justice and one of the primary safeguards from authoritarianism and oppression by a ruling class.

And so, referring to the members of Congress, James Madison wrote in Federalist No. 57: “[T]hey can make no law which will not have its full operation on themselves and their friends, as well as on the great mass of the society.”

Today, elected officials need to be reminded of these truths. Under pressure from Congress, the White House has carved out a special exemption for Congress and its staffers from ObamaCare—the law it recently deemed necessary for the entire country. No Republicans voted for ObamaCare. Yet it appears that some of them support the exemption President Obama approved on his own—so they would not have to go on record with a vote for or against it.

This is the height of hypocrisy, and worse, a trampling of the Founders’ code of equal application of the law. Having forced a health law on the American people, the White House and Democrats now seek to insulate themselves from the noxious portions of the law, and from the implementation struggles, indecision and uncertainty that many other Americans face today.

In other words, Congress’s health-care premiums will not rise, but yours may. Members of Congress will be able to afford to keep their health-insurance plan, but you may be kicked off yours. They will be able to afford to keep their doctors, but you may have to find a new one.

Rep. Ron DeSantis, a Republican from Florida, recently put forward legislation—aptly named the James Madison Congressional Accountability Act—which would end the special exemption. In the Senate, Republicans David Vitter of Louisiana and Mike Enzi of Wyoming have also introduced legislation to end the exemption.

In response, several Democratic senators have reacted by drafting legislation that would punish anyone who votes for Sen. Vitter’s plan by permanently blocking an exemption from them and their staff, even if Mr. Vitter’s law doesn’t pass. It doesn’t get more vindictive and petty than that.