America's Future Foundation

What does purchasing gold have to do with healthcare?

Don’t worry; the government probably doesn’t know either.

Yet, “[starting] Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

 This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation.” David Galland went as far as to speculate that “[the] implications of this move transcend just the precious metals. Rather, this is a deliberate step in the direction of implementing a VAT – once the government has everyone reporting essentially every transaction, taking the next step is a snap.”

With American policies decimating the value of the dollar, it makes sense for anyone with some insight to invest in gold. President Obama’s behemoth bill has ensured that this will not go without punishment either.

For three years, a few hundred liberal journalists engaged in an off-the-record internet email group called JournoList, which often plotted stories and ways to portray news to help the political left. It was finally closed down last month. Thankfully, JournoList continues to leak information from its archives so that we can see the farce that the American news media has become. In the WSJ Political Diary newsletter, John Fund writes, “[some] of the comments will no doubt revive conservative allegations of a liberal news media conspiracy. Spencer Ackerman, then of the Washington Independent, now at Wired, urged fellow journalists to kill the story of Mr. Obama’s ties to the controversial Revered Jeremiah Wright by going after some of his critics. ‘Fred Barnes, Karl Rove, who cares—and call them racists,’ he urged. ‘What is necessary is to raise the cost on the right of going after the left. In other words, find a rightwinger’s [sic] and smash it through a plate-glass window. Take a snapshot of the bleeding mess and send it out in a Christmas card to let the right know that it needs to live in a state of constant fear. Obviously I mean this rhetorically.’”

For many months, the media campaign against Fox News, and related organizations, has looked like a Saul Alinsky smear campaign. Of course, it has been very hard to articulate this with some credible evidence. Finally, though, much like the “Climategate” emails put a hole in the IPCC ‘consensus,’ there is some tangible evidence that there is reason to be skeptical of the mainstream approach to covering politics.

Today in the Washington Post, one of my favorite writers, Anne Applebaum, wrote a very bold Op-Ed entitled, “A government of the people’s every wish?” Though many people tout the American brand of “rugged individualism,” the sobering reality is that many Americans do not practice what they preach. In fact, “[the] majority of Americans are wary of global trade, don’t trust free markets and also think that ‘the benefits from . . . Social Security or Medicare are worth the costs of those programs.’ And when the sample is restricted to people who support the Tea Party movement? The share is still 62 percent.”

Perhaps before we wave our Gadsden flags we should be reminded that “[a] secretary of state or defense traveling with dozens of cars and armed security guards would seem absurd in many countries, as would the notion that the government provides a tax break if you buy a house or that schools should close if there is ice on the roads. Yet we not only demand ludicrous levels of personal and political safety, we also rant and rave against the vast bureaucracies we have created — democratically, constitutionally, openly — to deliver it.”

Naturally the Applebaum article reminded me of Bryan Caplan’s brilliant book, The Myth of the Rational Voter, which outlined the case against democratic popular opinion as yielding the greatest results for the individual. As Caplan explains, “[in] politics as in religion, some beliefs are more emotionally appealing than others. For example, it feels a lot better to blame sneaky foreigners for our economic problems than it does to blame ourselves. This creates a temptation to relax normal intellectual standards and insulate cherished beliefs from criticism — in short, to be irrational.” Furthermore, democracy provides little reward to be well informed on every issue but offers a collective yolk to bare the burden of everyone’s seemingly “insignificant” choice between candidates. This renders the election process privy to nonsensical, emotion-filled campaigns that repeatedly result in poor-equipped candidates. (You’ll have to read more Caplan to truly appreciate the argument – I cannot do it justice.)

I am always a little saddened to find myself in agreement with people like Caplan and Applebaum. Commentators like George Will always regard those on the left-wing as the elitist snobs with no faith in the common man. Yet the number of people who are uninformed about politics (and still choose to vote) doesn’t leave me with much regard for public elections.

Normally, when speaking about my beloved private sector, I have a high degree of faith in people’s functioning rationale. In fact, that is a requirement in order to trust the free-market  to the degree I do as a libertarian. It seems like the overwhelming power of the government is the variable inciting my cynicism.

If you, like myself, read too much financial news during the day, it is easy to become jaded with the same mantra about China inevitably becoming the world’s number one superpower in a number of months. While the Obama administration has done nothing to squash these articles and blurbs, I found a very interesting article in The Washington Post on Sunday. “Zhou and Chao, a husband and wife from Taiwan who now live in Shanghai, run one of China’s oldest and most successful consultancies helping well-heeled expectant Chinese mothers travel to the United States to give birth.”

The service to California costs roughly $1,475 but includes “a three-month stay in a center — two months before the birth and a month after. A room with cable TV and a wireless Internet connection, plus three meals, starts at $35 a day. The doctors and staff all speak Chinese. There are shopping and sightseeing trips.” Perhaps less quantifiable, though, is citizenship for the unborn child. The people who use this service, considered to be the elite in China, still find it more desirable to have their children in the American system. “The United States is widely seen as more of a meritocracy than China, where getting into a good university or landing a high-paying job often depends on personal connections.”

Perhaps I will have to teach my children Mandarin in order for them to get ahead in the workforce, but at least America’s place as a superpower of liberty is (relatively) intact.

Every good libertarian has read Ayn Rand’s magnum opus, Atlas Shrugged. Ergo, I don’t believe I have to recite the influence it has held in the movement and a synopsis of Rand’s philosophy, ‘Objectivism.’ What I may have to explain, however, is the place of David Kelley’s Atlas Society, named as homage to the great book.

The Atlas Society serves to “[promote] the philosophy of Objectivism and its core values: reason, achievement, individualism, and freedom.” Importantly, though, they belong to the “open” faction of Objectivism. That is to say they reject Leonard Peikoff’s theory that Objectivism is a “closed system” containing only the philosophic principles advocated by Rand during her lifetime. They believe in a dialectical interpretation of Rand’s writings, an approach evident by the array of issues they use her texts to examine on their website.

It’s always so wonderful to meet people at events like Freedom Fest because, on one level or another, many of them try to implement the philosophy of liberty in their lives on a practical level. The “open” faction of Objectivism is, in my opinion, what keeps it relevant and useful to these people, which is why I was quite thrilled to see the Atlas Society represented. TAS is a great resource to see Rand filtered through a serious philosophical lens with an element of practicality.

At Freedom Fest this year, there were a series of lectures about foreign countries with accommodations for financial protection. The group that conducted these controversial chats is referred to as the Sovereign Society and they specialize in consulting expats. According to their website, “The Sovereign Society’s highly qualified Council of Experts, consist of carefully chosen professionals located in select tax and asset havens around the world.  [Their] experts have spent their careers discovering the best global investments, the safest tax havens and the most secure devices in which to protect … assets.”

If President Obama’s agenda to “Europeanize” America comes to fruition, you might as well go where the baguette and cheese tastes better and the banking is a bit more discrete. Many of the people in the audience seemed to agree that America just isn’t as free as it used to seem. I’d like to be able to refute this, but I also just stumbled upon an article about how, by dying in a year when there is no federal estate tax, George Steinbrenner potentially saved his heirs a 55% estate tax on his assets – or a tax bill of about $600 million. This is, of course, on top of the taxes he paid his entire life.

Is the Sovereign Society a group looking to orchestrate some sort of Galt’s Gulch? Maybe that’s an über romanticized version of it, but the metaphor of alienating “the producers” and “voting with [feet]” can account for their popularity.(“When the people find they can vote themselves money, that will herald the end of the republic.” - Benjamin Franklin, on Barack Obama.)

American citizens are the descendants of political and religious refugees. If the States don’t retain their status as a haven for autonomy, I see a bright future for the expatriation industry.  If you truly, truly cannot bear the tax burden in the United States, I suggest you take a look at these folks. My New York snobbery, however, has rendered me unable to consider living in Panama or Liechtenstein over Manhattan – regardless of the price tag.

Maybe Singapore, though….

A week in profiling interesting groups from Freedom Fest would not be complete without mentioning The Seasteading Institute (TSI). Led by visionary Patri Friedman, the grandson of Milton and son of David, TSI is a libertarian movement for “creating permanent dwellings on the ocean – homesteading the high seas. A seastead is a structure meant for permanent occupation on the ocean.” As their website explains, “the world needs a new frontier, a place where those who wish to experiment with building new societies can go to test out their ideas. Unfortunately, all land is already claimed. Enabling the ocean to be the next frontier, allows for startup societies to bring experimentation and innovation to political, legal, and social systems.” In other words, a true experiment in societal public choice will be made possible on the ocean.

The idea sounds far off, but the group cites innovations like modern cruise ships as indication that living off the high seas is quite possible with enough planning and infrastructure. They also believe in incremental approach to every area of seasteading or “breaking [their] ambitious visions down into small steps, and taking things one step at a time.” Patri and his team are constantly solving potential problems, finding funding, and devoting time to researching sustainable business models that can survive on the ocean.  Though they can cite donors like Peter Thiel, the man behind PayPal, TSI is also intent on creating a substantive group of people interested in seasteading. This manifests itself in socials and lecture events, but also Ephemerisle, a festival meant to showcase the potential culture of seasteading. Next year, they will (appropriately) be collaborating with Reason for a cruise in the Caribbean. I, for one, will be in attendance.

One of the more interesting groups present at FreedomFest was the Berlin Manhattan Institute (BMI). No, the group isn’t an official outpost of the famous NY Manhattan Institute, but it shares a similar goal of influencing policy with a classical liberal touch. (The reference to Manhattan in the name is a nod to their correspondence with American and English-speaking policy groups.) As someone who studied in Berlin at Humboldt University, I can attest that they are the best libertarian thinktank in the region.

The director of BMI, Wolfgang Müller, has done a number of interesting pieces of economic research in a previous role at the IUF, the free-market predecessor of Berlin Manhattan. However, his most recent focus has been on the “Green Movement” – a faction of European politics that is commonly used to usurp state power. This example in European politics is worth taking note of by American classical liberals as a cautionary tale. Müller and his team at BMI launched “The Green Freedom Campaign” last month in an effort to inform and influence those skeptical of the “big government” answer to resolving environmental problems. I, for one, will be using it as a resource to cite the impediments in the European “environmentalist” solutions.

If you follow the AFF Twitter account (AFF_DC), as I encourage everyone to do, then you should be acquainted with yours truly – the tweeting correspondent for AFF at FreedomFest (FF) in Las Vegas. From July 8 – 10, I spent my days amongst a few thousand fellow classical liberals while listening to great talks from scholars and occasionally sparring verbally. Anyone who is anyone in the liberty movement is at least acquainted with the names of those who spoke at FF this year. Libertarian stars like Steve Forbes, John Mackey, Peter Schiff, Tom Palmer, Dinesh D’Souza, Charles Gasparino, Steve Moore, Tom Woods, David Kelley, Charles Murray, and Joel Stern were all present this year. The speakers, who were all very easily accessible to talk to personally, were complimented by the presence of Liberty-oriented groups, from the Austrian Mises Institute to the more conservative Heritage Foundation. I will be blogging recaps of FF all this week to help give more exposure to some of the more interesting talks.

Being a libertarian conference for adults who are largely engaged in the private sector, FreedomFest focused heavily on economics and finance. However, I encourage all levels of economically-knowledgeable libertarians to attend next year. There were many forums on personal finance, as well as policy lectures, which were easy to digest and very helpful to a philosophy major like myself. There were also some very sound lectures on political theory – particularly from the rockstars of Objectivism imported for Ayn Rand day. The Las Vegas atmosphere was incredibly conducive to “breaking the ice” and creating a sense of camaraderie amongst those who truly understand sound economics and axioms of non-aggression.

The organizers of FF are looking to expand attendance by thirty percent next year. So let me use my soapbox to give a concise endorsement:
Somewhere, between the futuristic models of Patri Friedman’s Seasteading Institute and the cries for nullification by historian Tom Woods, FreedomFest can remind anyone why they occupy the grossly underrepresented faction of the American political system called “libertarianism.”

In Saturday’s Wall Street Journal there was a featured article about the rise in popularity of the prenuptial agreement. According to a 2006 survey sponsored by the matrimonial lawyers group, “80% of matrimonial lawyers said they had seen an increase in couples signing [prenups] in recent years.” Many of the people signing them, however, are part of the Baby Boomer generation. These couples endured the recent financial crisis, when the Dow fell over 50% over two years and home values declined. Finances have always played a prevalent role in marriage, but the Boomer generation has this factor conflated with their excessive rate of divorce. “Almost 40% of boomers who have been married have gone through at least one divorce, according to 2004 Census data, the most recent available, while only about 30% of all people who have been married have been divorced. By their 50th birthday, 27% of boomers have moved on to their second or third marriage.”

I don’t think any cultural critic would seriously suggest that an increased rate in divorce is a great contribution to society. I am always saddened to see the rate of divorce in the US. However, I have chosen to be optimistic since I believe this news has a few silver linings. For one, a prenuptial agreement entails the breaking down of assets. It’s nice to see that women, who are increasingly more college educated and autonomous, will be able to have a pre-arranged financial stake spelt out for them in a contract. The fact that many women prompt this negotiation is a great indication towards their empowerment.The same women who would have a vested interest in retaining their assets are typically college-educated ones who already have a divorce rate hovering in the low-20’s. A straightforward way to delegate compensation if they abandon their potentially-lucrative careers to raise children is an insurance policy.

My parents are not divorced and my mother is a college graduate with a career. However, I know many friends who have parents that married young and, typically, mothers with no higher education or job experience. Divorce tends to leave these women in a significantly less favorable position, and amplifies any disdain. A clear “plan of action” would, if done properly, later aide the party less capable of accruing capital in the marriage.

I hope the normalization of prenuptial agreements may spark a healthy trend with many in my “Millennial” Generation. Prenuptial agreements used to be something that the rich and famous would forge to protect their earnings. A conversation about finances, though admittedly a very difficult one to bring up, at least acknowledges realistic possibilities and gives a sobering “worst case scenario.” The alternative, of course, having ones livelihood subject to a judicial process, is not always congruous and fair. With a rise in popularity, this will hopefully sound less unromantic. Of course, children who are the product of a divorced marriage are much more likely to incur one themselves. Yet my generation seems to be marrying later on in life – which helps decrease the likelihood of divorce. With an amiable agreement on the premises of a relationship beforehand, hopefully the decision to marry the “right” person will be more clear and correct than ever before.