Sunday, September 28, 2008

Paid to BE Rich

Republicans like to complain about welfare handouts: how they make people lazy, how they break down the family, how they lead to criminal behavior. Fair enough.

But what about the old money rich? They get checks in the mail without working as well: dividends, rent, interest, capital gains, trust fund stipends… You don’t much hear Republican activists complaining about such “unearned” income – unless the recipient happens to be married to the Democratic Party presidential nominee (Teresa Heinz Kerry).

Instead, Republicans tend to celebrate passive income. They complain of “death taxes” and “double taxation.” They often call for cuts or the repeal of the corporate income tax and capital gains taxes. According to many Republican politicians and advocates, you shouldn’t pay taxes on your income unless you had to work for it!

In all fairness to said Republicans, some of their arguments have merit. The U.S. savings rate is too low, and robbing those who make passive income would make it lower. Socking mourners with a huge tax bill is mean-spirited; an entire industry revolves around skirting death taxes. And yes, old money aristocrats do play an important role in a healthy society.

But old money aristocrats don’t need welfare from the government! Such is the core theme of this blog. The rich are subsidized for being rich. Well over a trillion dollars each year is diverted by the federal government towards boosting the rate of return for those who have money to invest. And that’s above and beyond so-called corporate welfare. States and localities raise this subsidy figure even higher. In other words, the rich receive at least as much largesse as the poor.

If you want to know what ails the middle class, you have come to the right place. Over the course of the next few months I’ll reveal the gigantic indirect subsidies to the old money rich. These subsidies come at the expense of wage earners and entrepreneurs alike. I’ll expose:

  • How the U.S. federal government directly subsidizes those with money to lend – to the tune of nearly a half trillion dollars so far in the current fiscal year.

  • A social welfare program that protects the old money rich from competition, to the tune of nearly $800 billion so far this fiscal year.

  • How state and local government subsidize old money investors and how the federal government encourages the practice.

  • How the federal government encourages debt servitude by the middle class, providing billions more for the money-lending class.

  • Some extremely easy ways to simplify the tax code while making it more progressive.

  • The ultimate tax reform; how the government would collect taxes if it were a fee for service business.

  • The useful functions performed by the old money rich, why simplistic soak-the-rich policies backfire.

  • The parasitic functions performed by the very rich, where soaking the rich can actually improve the economy.

And if I get enough readership to this blog, I might just throw in some more goodies such as:

  • How to turn the tide away from wage serfdom.

  • How to productively reduce the U.S. trade deficit.

  • How to tame the frantic consumer society, so we can all get a taste of the relaxed lifestyle of the old money rich.

  • How more people can get rich.

That last one might have surprised you. This is not your typical socialist or progressive blog. This is a liberal blog, in the oldest sense of the word. It is a blog for liberty and against aristocracy. Too many people forget that Adam Smith was a liberal, both in the sense of liberty and in the modern sense of being progressive. He wrote on how to reduce the rate of profit and increase wage rates. Most modern liberals have forgotten these lessons, and today unwittingly side with the modern aristocrats. I hope to clear up this confusion and help create a society that is neither socialist nor capitalist in the current sense.

I want to help create a society where it is easier to get rich, but harder to stay rich.

Thursday, September 25, 2008

Privacy Policy

Time to get the legalese out of the way. (If you are looking for content, skip this article. If you like reading privacy policies, read on.)

The Internet affords a certain amount of privacy, but it is not complete. All web servers note your IP address, and thus server logs can infer that person x saw y set of pages. While this IP address does not by itself identify an individual, it does identify the city that individual’s service provider (ISP) is located. Also, the HTTP protocol includes the link that brought you to a particular page, so I can tell which page contained the hyperlink person x came from, but not what x browsed before.

In these days of big services (like Blogger, Google, etc.) and third party widgets (contextual ads, etc.), certain third parties can significant information could be gathered about your browsing habits across many web sites. I’ll link below to the relevant third parties below.

So, herein I describe what I do with such information and I’ll point you to the services I use so you can read their respective privacy policies.

Email Policy:

I hate spam as much as you do. If you send me an email (, then I’ll do my best to guard your address. I won’t sell or rent it, and I’ll endeavor to avoid cc’ing you to strangers (but accidents do happen). I don’t have any newsletters at the moment, so email traffic back from me should be light and personal. Should I start a newsletter in the future, you might get an invite, but you will have to actively opt in to be subscribed. I publicize my gmail address here because of gmail’s spam filtering ability. If you email me, you might get a reply from one of my other addresses ( or Rest assured, such an email would be from me, no leak occurred. It’s just that I’m not a big fan of web email except for its superior spam fighting capability.

Gmail’s privacy policy is


Like many bloggers, I like to see what kind of traffic I am getting, and where it comes from. I use
for this purpose. Go to their site to see what kind of information I get to see. I’ll summarize: I get to see how many pages served, where people are coming from, what cities their ISPs are in, and what pages are read by the same person. StatCounter does use cookies when allowed.

I use this information mainly to see how many pages are being read, where I am getting links from, and which keyword phrases bring people to this site. Once in a while I do look at the recent visitor activity; it’s nice to see when someone likes my writings enough to stay and read multiple pages. In general I cannot link such data to a particular person, but if you send me an email right after reading a bunch of pages, I might put 2 and 2 together. Whoop tee do. I might correctly guess which hyperlink brought you to this site and which pages you read before wrote me. I doubt such information will be embarrassing. And I’ll likely forget the info pretty quickly anyway as I’m a busy man.

If such things give you qualms, don’t read blogs. Or use a proxy server, block the DNS addresses and cookies of the various statistics services, or whatnot. Bloggers write to be read, so they tend to look at their stats.

StatCounter’s privacy policy can be found


This blog is hosted by blogger. Blogger’s privacy policy can be found


I use Feedburner to manage feeds and provide some other widgets (Digg this, etc.). Feedburner’s privacy policy can be found

Contextual Ads

I don’t have contextual ads…yet. Should I add them, the ad server will also have orts of information about your IP address’ browsing habits. I intend to add a link to the ad service’s privacy policy here. (On the off chance I forget, it should be an easy lookup for you.)

Update (April 2009)! Google has now implemented
"interest-based advertising."
That is, Google is now tracking your path across the web through the cookies placed by Adsense (and possibly other services). This allows Google to serve ads based on your interests vs. just the info on the page you are looking at. If this disturbs you, you can opt out of this and other similar ad tracking systems.

Monday, September 1, 2008

The Rich Get Richer…

And the poor demand more welfare.

Come to think of it, the middle class wants more welfare too. Many are calling for universal healthcare, a graduated tax code, and more.

And so the United States waddles towards fascism. Or maybe socialism. It depends on which party is in power. Either way, the prospects are bleak for lovers of liberty, until we fix the underlying dynamic.

More Liberty Requires More Equality!

Liberty, oligarchy and democracy are mutually exclusive. You might have two out of three, but not all three at once.

You can have oligarchy and democracy at the same time – if the government gives out enough largesse to keep the plebeians happy. It’s happening now in the United States. Government has ballooned during the past century. In other First World nations, the process is further along. In Western Europe, everyone is a welfare recipient.

You can have oligarchy and economic freedom at the same time – if you dispense with democracy. Lichenstein and Dubai come to mind. Another example would be Hong Kong when it was ruled by the British. The United States managed to have small government and democracy at the same time because: 1. The right to vote was limited to property owners. 2. We had an open frontier so ambitious wage serfs could become property owners. Once suffrage was extended to the poor and the frontier closed, government ballooned.

Actually, I was a bit too optimistic in the previous two paragraphs. While Western Europe is still theoretically democratic, the European Union bureaucracy is taking over. And while small principalities sometimes flirt with market economies, they often do not. Furthermore, civil liberty and oligarchy do not mix. Protection of a wide wealth gap requires a police state.

Liberty requires equality. Not complete equality, for we are all different. But liberty requires a wealth gap that is somewhat proportionate to our relative abilities and ambitions. In most countries the wealth gap is far larger. Ability and ambition produce wealth, and once wealthy, the rich get paid further for being rich. Differences magnify. Envy expands. Theft ensues.

When the party of The People gets in power, the government does the stealing. The legislature levies steeply progressive taxes, and doles it out as it sees fit. The poor get paid to be poor. The middle class loses its independence by living on entitlements.

When the party of the productive gets in power, the government cracks down on the poor. We get outrageously long jail terms, Three Strikes laws, drug wars. And we get yet more police state fun, such as that taste of totalitarianism you experience at the airport – unless you can afford our own private jet.

With bipartisanship, we get a contradictory mess. The income tax gets riddled with loopholes. The tort system hammers the productive and acts as a lottery for the lucky poor while at the same time the legal system is too expensive for the poor to use unless the stakes are high enough to justify contingency payments. The government pays the rich and punishes the rich.

In all scenarios, government grows.

The Secret Subsidy

Those who love liberty must first pursue equality. Either that, or they must dispense with democracy and hope for well-behaved dictatorships or private protection corporations.

This seems a contradictory strategy. Socialists were the chief enemies of liberty during the past century, after all. Their pursuit of equality at any price led to police states, gulags, and mass starvation.

We who love liberty can do better. The formula for more equality can be found in Adam Smith’s book. Mercantilism still lives. The rich may be taxed, but they are also subsidized – heavily. I am not talking about “corporate welfare” here; that’s small potatoes. Each year the government redirects a trillion dollars towards those who already have money.

A trillion dollars, every year!

This is a gigantic subsidy, and hardly anyone talks about it. About the only ones who talk about this subsidy are the conspiracy theorists, who pin the blame for this subsidy on robber baron families, the British crown and/or Jewish bankers.


This gigantic subsidy is supported by millions: Democrats, Republicans, liberals, conservatives, college professors, union members, soccer moms, and more. Maybe the old money super-rich have secret meetings to keep the gravy train going, or maybe not. It doesn’t matter. They could be easily out-voted. The real “conspiracy” is a “conspiracy of ignorance.” The victims vote for welfare for the rich.

Over the next few months I will expose this gigantic subsidy. I will also point out smaller subsidies for the rich, and ways by which the government holds down the poor. Fix these and we will have true meritocracy, true equality of opportunity. And we will have liberty in the process.

Stay tuned.