Here are some definitions of Big Government from a few online dictionaries.

“Government perceived as being excessively big-spending and attempting to control too many aspects of people’s lives.” MSN Encarta

“Government that seems to have too much control over people’s lives.” Macmillan

“Any government wielding excessive control over its citizens or interfering with their lives.” Dictionary.com

You see the themes – control, interference, wasteful, big-spending.

That’s true, of course, but we’d like to be a little more specific and thought-provoking in our definition.

Big Government, in its most raw form, is a group of individuals that through coercion turns human beings into either beasts of burden or perpetual children.

It is that group which preaches entitlement over responsibility, dependency over self-sufficiency.  It purports that people are incapable of caring for themselves through free and voluntary choices, and therefore must be coerced into “doing the right thing.” It prevents human beings from being fully actualized, keeps them in a form of subjection and – in its most extreme form – slavery.

Does it do this deliberately and willfully?  Not in the beginning.  Isabel Paterson, in her book The God of the Machine, said:

“Most of the harm in the world is done by good people, and not by accident, lapse, or omission. It is the result of their deliberate actions, long persevered in, which they hold to be motivated by high ideals toward virtuous ends… …[W]hen millions are slaughtered, when torture is practiced, starvation enforced, oppression made a policy, as at present over a large part of the world, and as it has often been in the past, it must be at the behest of very many good people, and even by their direct action, for what they consider a worthy object.”

Even the alleviation of suffering, so long as it is done through plundering third parties, will result in more total suffering induced than ever relieved.  The total amount of suffering in the world cannot be reduced by forcing one group of human beings to relieve it in the way the tyrant desires.  The tyrant’s coercion makes more of mankind miserable, turns them away from productive endeavors.  In its extreme forms, Big Government paradoxically kills innocents in order to save lives.

Seen in this way, Big Government can either be a Tyrant or a Nanny, or a combination of both.  Either it enslaves you and coercively makes you work on its behalf, or it “protects” you from yourself, restricting your freedom while promising to care for your every need, in exchange for your agreement to keep it in power.

Either way, it treats you as either an animal to be burdened, or a scolded child to be suckled forever at its teat.

How you are treated often depends on whether or not you are willing to keep the ruling cadre in power.  If you do, you may lose your freedom but win the privilege of being coddled.  If you don’t, you may lose your freedom and be burdened.

So Big Government divides people into two groups: one group is the animals burdened with the task of producing the mothers milk forever; the other is that group which forever – or so it’s promised – drinks the mothers milk.

Now, in pointing this out, we’re not talking about any specific group that is favored by government and eats from the labor of others, we’re talking about all such group, from bailed out banks and companies, to subsidized farmers, to protected unions, to groups that benefit from tariffs, to the ever-growing unproductive government bureaucracy; in short, any form of corporate or public dependency program.

One of the central features of Big Government is that it encourages bad behavior in order to remain in power.  It bails out those who have made bad decisions in order to gain their support.

The individuals that comprise Big Government, of course, play god, determining which group of human beings will be the beasts of burden, and which will be the bailed out, dependent children.

Over time, people learn that it does not pay to behave responsibly.  In fact, the consequences for poor judgment will be so lessened as to have no moral authority over behavior.  People learn that they can live life however irresponsibly they want and some one else will be forced to pick up the tab … that is, until there’s no one left with any money or productive resources.

At that point, the system collapses soviet-style.  The beasts of burden decide that it’s easier to be suckled infants and then there are no longer enough producers to support the dependents.

One interesting phenomenon that we have noticed over the past decades is how Americans have behaved regarding debt and savings, and how the past decisions they made are now affecting them.

Look at what has happened in the U.S. over the last few decades.

This first graph shows the U.S. Savings rate (what percentage of their incomes Americans saved) over the past 50 years.

Notice that, for whatever reason, over the last 30 years people have been putting less and less money away for a rainy day.

Now, look at this graph of household debt as a percentage of disposable income over the last 30 years.

Despite saving less money, people are using more borrowed money to support their lifestyles, especially over the last decade.

Low savings rate + high and increasing debt load = people living beyond their means

At some point, the gig is up.

Now, look at this graph of the number of food stamp recipients over the last decade.  In the decades prior to 2000, the number of food-stamp recipients had been trending down.

So here’s the questions:

Are these events merely correlated or is there an element of causation?  That is, do government bailout promises encourage people to not take responsibility for their own lives, to prepare for “unforeseen” – yet predictable – misfortunes in the future?

Understand that we’re not arguing for or against this particular social program, just merely asking questions about whether or not Government Dependency Programs create Moral Hazard.

What do you think?  Do government handout programs enable bad behavior?

Does the knowledge that someone will be there to give you food, coupled with the knowledge that the government has the capacity to forever force someone else to pay for your livelihood, make you take less responsibility for your own well being, live on borrowed money, not save for a rainy day?

By asking these questions, of course we’re not advocating for letting the hungry starve.  We advocate for the support of voluntary charities, and lots of it, and we believe that each of us has a personal responsibility to responsibly care for the poor among us in ways that do not create dependency and thereby rob recipients of their dignity.

If you reward bad behavior, you’ll get more of it.  If you punish responsible behavior, you’ll get less of it.

Big Government must be opposed.  If we don’t oppose it immediately, over time in its most extreme forms it reduces people to animals or infants.

As Cato’s Letter #38 taught:

“What is government, but a trust … which ought to be bounded with many and strong restraints, because power renders men wanton, insolent to others, and fond of themselves.”

So what can you do? 

Sign up for our RSS feed and become a fan of our Facebook Page. We’ll continually send you information about how you can help keep government in its place.

Then, Join DownsizeDC.org and participate in it’s campaigns.  It takes less than five minutes per day, and you just participate in the campaigns you like.  In our opinion, it is the best project around for reducing the size and scope of Big Government.

originally published May 21, 2010.

Complexities in the code and a labyrinth of rules to obtain credits mean tax compliance costs are unacceptably high for small businesses.

Small businesses want simplicity in the tax code and they want rates for individual taxpayers kept low. Close to 75 percent of small businesses pay tax on their business income at the individual level, making it imperative that the 2001 tax cuts be made permanent.

Unduly burdensome regulations disproportionately affect the small-business community costing them around 36 percent more per employee than their larger counterparts.

In FY 2010, federal agencies unleashed 43 major new rules’  and the costs of implementing these rules was $28 billion.

According to the Congressional Budget Office, the budget deficits in 2009 and 2010, as measured as a share of GDP, were the largest since 1945. They represent almost 10 percent of the GDP and the estimated budget deficit for 2011 is going to stay in that range.

On one hand, the whole notion of earmarks and pork barrel spending encourages many impractical pet projects from doofy legislators. To see their ban would send a message to the fiscally irresponsible politicians, on both sides of the aisle, who misuse (our) federal tax dollars. On the other hand,eliminating 100 percent of earmarks in fiscal 2010 would have cut the federal budget by less than one-half of one percent.  In other words, earmarks are close to the least of our worries.

She’s actually mistaken, and she’s making a common mistake because she doesn’t understand the role earmarks play in the legislative process.  They are a lever whose spending impact is far greater than what they appear to be.

Look at this issue from another angle.  For just .5% of government spending, why is there such resistance from Congressional Leadership (on both sides of the aisle) against getting rid of them?  That’s the question to ask.  Once you ask it and look closely, you see why.

Earmarks are an effective tool to manipulate Congressional voting blocks.

Take “Legislation A” that does not stand-alone well and cannot muster majority support.

Then take “Project B” that a single legislator wants in his district.  It favors one group of people (say, a state or city) at the expense of all others.  As a stand-alone project B could never pass legislatively if introduced alone.

You’d think that because the legislation and the project don’t stand well on their own that combining them would also result in something that doesn’t stand alone well.

You’d be wrong.

What if I told you that the way Congress does business now often leads to Legislation A passing while (and because) it includes project B?

It happens all the time and earmarks are what makes it possible.

Congressional Leadership can pass legislation that otherwise could not garner a majority if they will throw in pet projects (in the form of earmarks) to buy votes.  See, they are giving a bribe to a legislator so that the legislator can go back home and tout the fact that his district got project B funded and put in place (a targeted benefit) while refusing to call attention to the bad legislation they passed (a dispersed cost).

When costs are dispersed but benefits targeted, that’s where corruption and vote buying will most emerge and where special interests most come to play.

So – because of earmarks – you end up with the combination of bad legislation that includes bad and wasteful projects.

Votes are bought through earmarking grants.

It’s like logrolling, but unlike traditional logrolling, it’s a crack-cocaine version …

Without earmarks big, bad, costly legislation is less able to be forced through.

Get rid of earmarking, and you get rid of the “lever” through which some of our worst legislation has been passed.

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Robust job growth requires boldness and risk-taking in the private sector. What we have now is boldness and risk-taking in the public sector. It is loading as much debt onto the balance sheet as possible, and creating the predicate for more regulation, spending, and taxes. We have active government and hesitant entrepreneurs.

Late in the Great Depression, Franklin Roosevelt’s Treasury secretary, Henry Morgenthau, told Congress, “We are spending more than we have ever spent before and it does not work.” Democrats have made Morgenthau’s plaint their governing ethic. In so doing, they are demonstrating their political and intellectual bankruptcy even faster than they are bankrupting the country.

Spending money does not create wealth.  Spending money does not raise the standard of living.

But it lets politicians feel like they’re “doing something” and gives their fat egos a boost.  Also, spending money buys votes  … even if it’s at the expense of what will soon be a bankrupted citizenry.

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The dotted line simply averages the sales for the month of the clunkers program and the month after.  I think it is pretty clear that we spent a few billion dollars making some used car owners happy (by overpaying for their vehicles) but did absolutely nothing to move the trend line in auto sales, as the program appears to have just pulled forward purchases rather than stimulated new ones.

Was this predictable?  Of course. In August 2009 when Cash for Clunkers was announced, we said:

The funny thing is that down the road even the dealers will suffer, because this program created false demand and just kicked the can down the road so that the dealers could put off their day-of-reckoning a little longer.

You can read our full Aug 2009 analysis of Cash for Clunkers and get educated on the Broken Window Fallacy that Government commits, daily.

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1) the person who has the need is able to communicate that need to someone who can provide for that need.
2) the person who has the means to meet the need is able to communicate that fact to those who have the need.
3) the need provider and receiver have the freedom to agree to the terms under which that need will be met.
4) the absence of interference in the above process
5) the absence of interference in the subsequent delivery of all provisions necessary to meet the need

A very good reason to be pro-small-government and anti-bureaucracy is because of the destruction wrought by bureaucrats that so gum up the works in the above process that even though there are needs in the world that could be met, the cost of meeting those needs is so high that need providers don’t get into business.

Nowhere is the risk of bureaucracy so great than is small markets, which are most often filled by small businesses.

Why?  Because the cost of complying with regulation is the same whether an enterprise is large or small.  The regulatory cost of setting up a business (licensing, permits, etc) is the same for a large or small business.

The greater the burden to set up a business, relative to the opportunity of setting up such, the less likely the business will be set up.  Because targeted problems usually have small markets, and because small markets are often best served by small businesses, when regulatory costs are high these businesses don’t get started and these markets don’t get served.

Well, what happens when regulatory and compliance costs massively rise across the board for ALL small businesses?  We’re about to find out.  From Cato:

The health care bill that the Democrats rammed through Congress at the end of March seems to be the gift that keeps on giving.

The latest surprise is Section 9006(b)(1) — come on, I know you’ve read it — which requires that businesses provide a 1099 form to every vendor with whom they do more than $600 worth of business over the course of a year. A 1099 is similar to a W-2 form, but for income other than wages. Businesses will also have to file a copy of the form with the IRS.

Of course businesses already have to file 1099s for outlays on items like consultants.

But the new rule will mean that even the smallest of businesses will have to issue a form — and file with the IRS — for virtually every purchase or payment.

This is a very, very big regulatory expense.  What will happen is that many people who could start small businesses won’t start small businesses.  Other small businesses who are in operation today will add this to the number of burdens laid on them by government, and they’ll shutter.

*Shudder*

Big Government, the Grinch that keeps on Giving.

So, what to do?

Lobby your congressional representatives like mad.  Call and let them know that if they do not repeal this portion of the health bill, the regulatory requirement could put your small business out of business.

1.  ObamaCare means a harder economic climate for Small Businesses

At core ObamaCare is a mandate.  It is a requirement that people purchase health insurance.  This means that more dollars that were available for other purposes in the past, will now be directed to health care in the future.  Unless your small business serves the healthcare industry, these dollars are not headed your way.   Also, since nothing in the bill actually reduces heathcare and heath insurance costs, but actually increases them, an additional amount of dollars will flow into healthcare just to meet the rising costs.  These are dollars your businesses will not see from your customers because they are required to divert them elsewhere.

2. ObamaCare means higher health insurance expenses for Small Businesses

As noted above, nothing in ObamaCare reduces expenses.  The only way to reduce cost is to increase supply or decrease demand.  ObamaCare increases the demand for health care while doing nothing to increase the  supply of health care.  You will see your premiums increase if you provide healthcare to your employees or yourself.

3. ObamaCare means penalties and fines

For some small businesses, you’ll pay a penalty (fine) if you don’t provide health insurance for your employees.

4. ObamaCare means that part-time workers will become a dying breed

The penalty for not providing health care to employees is the same for part-time and full-time employees.  Since this penalty is part of the overall compensation expense for employing someone, it doesn’t make sense to employ part-timers.

While a simple analysis of the bill would lead any dispassionate analyst to conclude this, we also have empirical proof.  This approach to healthcare – the health insurance mandate – is currently being tried in Massachusetts and has failed.

None of these developments is good for business or good for job creation.  The US was headed toward bankruptcy before ObamaCare.  It’s just headed there faster, now.  The only way out is to (a) cut spending, (b) raise taxes, (c) print money, or (d) default on the debt.

It’s your guess as to which is our fate.

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Related Entry: This is Gonna Hurt: The Pain for Mandatory Health Insurance

Graph from the American Thinker, Care Sales ($millions) Reported by Dealers.:

Cost to taxpayers for each extra car sold because of Cash for Clunkers:  $20,000

Number of clunkers turned in (and taken out of the market):  677,081

Price increase for used cars since CfC:  13.7%

Change in car sales from July 2009 to February 2010:  -0.6%

Currently we have four generations of people who are dependent almost entirely on what government is willing to give them.  If they earn money on their own, they are deprived of the Government’s largess.  If the household has a married couple in the residence, incomes of both is considered and there is no Government contribution to their income.  If they have too much in the way of assets, the household does not qualify for government aid.  The more children an unmarried woman has, the more she will receive from the government, unless she is generating income, herself.  The result is an entrapment of an entire segment of our society in poverty and helplessness.  They are de facto wards of the State, and have little opportunity to free themselves of subservience.  They are doomed to their miserable fate as are their children.

Slavery does not end there.  Those who are not trapped in the welfare pit are preyed upon by the Government which perpetuates the hopelessness of the poor.  We have to pay a large bureaucracy to administer the dole and provide the funding for the meager assistance provided by the system.  For those of us who provide the forced contribution to this shameful scheme, the tariff is at least 1/3 of our annual incomes to fund the Government which operates an economic sink hole.  Truly, much of our tax dollars are used for the necessities of society, as a whole, but too much is used to keep too many in wretched states.

How can we possibly correct the injustice?  It will not be easy, and certainly not be painless.  We have to start with individual responsibility.  We cannot expect to have banks or individuals bailed out.  It has been observed that there is no freedom without responsibility.  As long as our current system is perpetuated, none of us is free.  We are all slaves to the Government.  Instead of giving money in small packets to those whom we have discouraged from being productive, reward productivity.  Educate and supplement income to a livable level.  Require those receiving assistance to develop skills to support themselves.  Once people can lift themselves out of poverty, they are free to determine their own futures.  Unless all are free, no one is free.

Dr. Jacobs is a Reproductive Endocrinologist, practicing in Carrollton, Texas, a northern suburb of Dallas. He completed his residency training in obstetrics and gynecology at Baylor College of Medicine in Houston, and remained at that institution to become its first fellow once Baylor achieved accreditation for an advanced training program in Reproductive Endocrinology and Infertility. Dr. Jacobs has served on the faculty of several medical schools and was director of Reproductive Endocrinology at Texas Tech Health Science Center in Amarillo. Currently, in addition to his clinical activities caring for infertile patients and those with recurrent pregnancy loss, he is Chairman of the IVF committee at Baylor Medical Center in Carrollton.

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U.S. employers who tell workers to stay home when they are sick will have to give them paid time off for up to five days under new federal legislation proposed on Tuesday.

Is this a good idea?  Let’s look at the incentives.

First thing that really jumps out is that you’re now incentivizing businesses to NOT tell workers to stay home when they’re sick!

Next thing that jumps out is that if companies somehow overcome this incentive to not send sick workers home but are going to be forced to pay for all non-work from sick employees, guess which kinds of people aren’t going to be able to find work?  Right.  Those more prone to sickness, i.e. the weak and poor.

Just another example of how a government program will hurt the very people it purports to help.

By requiring payment for sick leave, you introduce discrimination against the weak and incentives to invite more illness into the workplace.  Let the market work this out, not bureaucratic central planners.  Employers know they have to strike a balance with their employees, their workplace, their customers, etc.  By mandating a certain, somewhat arbitrary course of behavior that the people involved have not contracted, the government creates perverse incentives that really do nothing to remedy the underlying concerns.

Also, if you’re not careful, you’ll get people faking illness (claiming they have symptoms that they don’t), or not taking precautions against exposing themselves to illness.  If you know you’ll lose pay if you get sick, you take precautions to avoid illness.  However, if you know that if you’re sick you’ll get paid anyway and can sit at home and watch TV, you’ll be less inclined to take close care of your health.  Think not?  Then you don’t understand people and their economic calculations.

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All of us are concerned about what health care costs in this country.  Most of the public is rightfully upset as to what it costs them to receive it.  What most of the public cannot see is what it costs to deliver it.  Truly, our technology and pharmaceuticals are expensive, but there are added costs to providing them, beyond research, development and marketing.  Add to that, the costs to hospitals and physicians just to keep their doors open are spiraling, as well.  I would like to examine some of the causes with you.

Perhaps the easiest starting point is the cost of liability insurance.  Everyone who owns a business either already has, or needs liability insurance.  Physicians who work in hospitals are required to carry a minimal level of liability coverage to maintain privileges to practice in the hospital.  We have a very litigious society, and the legal profession profits from it.  Someone who is cynical would assume the legal profession fosters it.  I choose not to pursue line of discussion, but rather how to deal with the problem.  Yes, tort reform is the cornerstone for managing the expense for all businesses, including those which provide health care.  After Texas enacted tort reform, there was a dramatic and precipitous decline in the number of liability suits filed.  I will limit my discussion to medical malpractice suits.

In Texas, as well as the country, as a whole, of all medical malpractice suits filed over the past few decades, only 10% resulted in a settlement paid by a physician or an award against a physician.  The problems were the expenses of defending the suits, and the few multi-million dollar awards for non-economic damages.  No one denies that a truly injured party should be compensated for negligence, but awards need to be realistic.  Also, please note that 90% of the suits were eventually determined to not have enough merit to pay the plaintiff.  Oh well, it really did not cost much to file the suit, and you just might win the lottery.

As a result of Texas tort reform, one liability carrier, which functions like Mutual Insurance Company has lowered premium rates in each of the past 5 years and has paid dividends to policy holders/members.  There has been an influx of new professional liability carriers into Texas, resulting in more competition, and a flood of new physicians from other states.  The Texas Medical Board is still struggling to catch up with new applications for licensure.  Tort reform is working.

Now, I would like to turn our attention to the pharmaceutical industry.  No, they are not the villain.  It costs many millions of dollars to bring a new drug to market.  Maybe as many as 10% of the compounds drug companies begin to investigate as potential new medications actually make it to the point of clinical trials, to gain Food and Drug Administration (FDA) approval for marketing to the public.  The drug companies are required to prove, to the best of their ability both safety and effectiveness.  Good!  Oh, there is also a problem.  The required testing has, in many cases become excessive, costing added millions of dollars to produce the new medication.  Several years ago, while I was on the faculty of a medical school, I was the primary investigator at our institution for a “new” product.  Actually, it was just a more pure product than one the same company already had approved and was selling.  It was a pituitary hormone used to stimulate ovaries.  The older product had a lot of waste protein in it after it was extracted from the urine of menopausal women.  The “new” product was virtually free of waste protein.  By the way, it had already been safely used in Europe for over a year, and worked extremely well.  The European experience was ignored by the FDA and the company spent several million dollars performing redundant testing before eventually gaining FDA approval.  I wonder how much cheaper this medication might have been for my patients if so much money had not been wasted.

I do not wish to whitewash the pharmaceutical industry.  I strongly object to their advertising prescription products to the public.  I do not know the relative cost of the television advertising, compared to having a couple of extra representatives visiting physician offices to market new products, as it was several years ago.  Clearly these slick ads on national television are quite expensive.

We need to also note that new medical devices are required to obtain FDA approval, before they can be used.  It is an expensive process.  Without having had personal experience in the investigation of a medical device, I do not have an adequate concept of how that process can be made more cost effective, but given the bureaucratic nature of the FDA, I am forced to assume that there are things that can be done.  The issue with the cost of devices and supplies does not end there.  Even something as common as a pair of scissors cost multiple times what it would if it were not marketed to use in a medical setting.  It may be the same item you might buy in a non-surgical specialty store, but if purchased from a surgical supply house, collect your Krugerrands.

That is not the end of wasteful unfunded mandates.  There is a non-governmental agency that inspects hospitals and other large medical facilities for the purpose of accrediting them.  It is the Joint Commission on Accreditation of Hospitals (JCAOH).  If a hospital does not pass JCAOH, it will not get paid by Medicare.  Now there is a scary thought for a hospital administrator.  Rightfully you say that there needs to be a set of standards to assure safety of hospitals and their ability to provide the care the public has the right to anticipate.  However, the accreditation process is not completely rational or just.  On one occasion, of which I have first hand knowledge, a JCAOH inspector gave demerits to a hospital for performing an investigation of its accuracy of billing, just as it was described in the JCAOH manual.  The problem was, the study was not what the inspector wanted, but there was no prior communication that this inspector was abridging his agency’s own manual.  This was an arbitrary decision of a single individual which resulted in a significant negative impact on a reputable institution.

Currently, JCAOH mandates that surgeons cannot remove hair in the operating room using a razor.  It must be done with clippers, which really do not work very well, and actually traumatize the skin more than a careful shave.  The rational is that it is supposed to decrease the risk of wound infection.  We have known for decades that shaving the night before does increase the risk of wound infection, but shaving immediately before surgery does not.  The publication I was provided as “proof” of the assertion that clippers are better provided no new data, but referenced itself several times, and the other publications cited did not indicate when pre-operative shaving was performed.  In short, what I was shown as documentation to support the ban on shaving, as a scientific or clinical publication, almost rose to the level of the National Enquirer.  It was an intellectual and academic fraud.  By the way, the disposable head on the clipper is far more expensive than a Bic razor.  Why cannot hospitals be allowed to do things cost effectively?

There can be significant saving in the delivery of health care, without endangering the public.  It will require honest scrutiny of existing regulations and mandates to eliminate or modify those that really do not improve quality of care.  Theoretic speculation as to benefit, without justification of the cost, is counter productive.  Let’s put a stop to that!

Dr. Jacobs is a Reproductive Endocrinologist, practicing in Carrollton, Texas, a northern suburb of Dallas. He completed his residency training in obstetrics and gynecology at Baylor College of Medicine in Houston, and remained at that institution to become its first fellow once Baylor achieved accreditation for an advanced training program in Reproductive Endocrinology and Infertility. Dr. Jacobs has served on the faculty of several medical schools and was director of Reproductive Endocrinology at Texas Tech Health Science Center in Amarillo. Currently, in addition to his clinical activities caring for infertile patients and those with recurrent pregnancy loss, he is Chairman of the IVF committee at Baylor Medical Center in Carrollton.

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Amateur film released on the Internet rocked the organizations and threatened their existence. 

The way each organization handled its respective crisis exposed a lot about the nature and character of the people who manage the organizations and helps us understand that, yes, ACORN deserves to disappear and have its executives investigated.

President Obama’s ties to ACORN should also be revisited and investigated, as should those of his current Political Affairs Director, who prior to joining the Administration worked for ACORN.

Domino’s problem video showed employees doing disgusting things to food that was to be served to customers.

ACORN’s problem videos were of a far more serious nature – ACORN employees aiding, abetting, and encouraging serious felony criminal behavior, including counseling people who came to them on how to smuggle underage illegal-immigrant girls into the U.S. to be employed as sex workers and then launder the funds (tax free!) that came from the work.

Both organizations faced an existential threat over the release and viral spread of these amateur videos.

To get an idea about the leadership character of both organizations, we can to look to what each did when the videos were released.

Domino’s expressed outrage at the employees’ behavior and immediately issue a public apology to customers.

ACORN expressed defiance and outrage at the filmmakers and said the films were doctored.  When additional films came out disproving this and made clear a pattern of corruption in ACORN’s offices nationwide, only then did ACORN leaders express outrage at employee behavior; yet they still refused to issue an apology or open the organizations records to show that the problems were isolated incidents in order to put to rest the suspicion that the corruption is systemic.

How did each organization deal with the employees implicated in the videos?

Domino’s filed a criminal complaint and pursued felony charges against the employees.

ACORN said that they “terminated” their problem employees but really just suspended them without pay, and then sued the filmmakers and threatened to sue news organizations that showed the videos!

Any principled and non-corrupt CEO would be sickened to discover such behavior from her employees, but feel grateful to find out this information and put an end to it.

But ACORN’s CEO, Bertha Lewis, does not appear to be embracing this role.  She initially stated blatant untruths about the films and refused to take ownership of the exposed corruption.  Once the evidence continued to roll out and was undeniable,  she acted like a concerned CEO and even went so far as to thank the filmmakers for exposing the corruption; but then moments later she threatened to sue the filmmakers for having uncovered the corruption! It might be funny if it weren’t true. What an unbelievable contradiction.

Bertha Lewis heads up a serially corrupt organization. She presides over an organization that is rotten to the core.  In the real world, she’d have been let go long before now, but she’s still there, and that further scandalizes the organization.

No wonder ACORN public perception is in the toilet.

Bertha Lewis needs to be questions about how much criminal activity she may have been aware of at ACORN – she’s a 16 year veteran of the organization and has worked there in many capacities and levels.  It’s not just these videos only that have occurred during her tenure, but many other scandals she has presided over.

She has presided over documented voter registration fraud. In fact, just last month ACORN suffered yet another blow when a former ACORN employee, a director of the Las Vegas office, agreed to testify about ACORN’s voter fraud in that state.

It is now dawning on people that ACORN may have thrown the Minnesota Senate Race, which resulted in the election of Al Franken to the Senate by a mere 312 votes.  Mickey Kaus surmised:

“ACORN claimed to have registered 48,000 new Minnesota voters. If just 1% were ineligible but cast ballots, or had ballots cast for them illegally, and survived the recount process … that’s 480 votes, almost certainly overwhelmingly cast for Franken.”

In addition to serially encouraging felony behavior and engaging in rampant voter-registration fraud, ACORN also shakes down businesses and engages in tax-cheating.

ACORN is a criminal organization, engaging in systematic and repeated organized crime.  It is, along with its sister organization SEIU, part of a Mafia-like structure that preys upon the poor and extorts money from the productive.

Perhaps the greatest outrage of all is that your president has long ties to ACORN over nearly two decades.

President Obama trained ACORN activists, worked as an attorney for ACORN, and also funded ACORN activities.

Of the recent controversies with ACORN, Obama said:

“Frankly, it’s not really something I’ve followed closely. I didn’t even know that ACORN was getting a whole lot of federal money.”

Really?  The man who over two decades worked with them, distributed money to them and worked as their attorney didn’t know they were getting a lot of federal money?

In 2007, Obama spoke to ACORN leaders and said:

“I’ve been fighting alongside of ACORN on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote in Illinois, ACORN was smack dab in the middle of it, and we appreciate your work.“

And not only that, Bertha Lewis’s former political director in New York, Patrick Gaspard, is now the Obama White House Political Affairs Director.  By way of Gaspard, there’s a direct line of communication between the ACORN CEO and President Obama.

It gets worse.  The Obama campaign actually paid money to ACORN to get out the vote for Obama, and then misrepresented it on their financial statements.

The Wall Street Journal reported that:

“The Obama campaign also gave Citizens Consulting, Inc., an ACORN subsidiary, $832,000 for get-out-the-vote activities in key primary states. In filings with the Federal Election Commission, the Obama campaign listed the payments as “staging, sound, lighting,” only correcting the filings after the Pittsburgh Tribune-Review revealed their true nature.”

Will our President and his team keep putting money into ACORN’s pocket and then obscure it in their financial statements?

ACORN is losing federal taxpayer funding (can you believe you were funding this racket?) and corporate backing, but more needs to be done to remove this blight and cancer from the American landscape forever.

Call your Representatives and express your feeling that ACORN should never again receive any taxpayer funding and that you want them to be criminally investigated by Congress.

Let them know that as a taxpayer you are outraged at what they’ve done with your taxpayer money and you want to see justice done.

And then let them know you want the Obama Administration’s ties to ACORN investigated.

Consider holding a rally near your local ACORN office and inviting the press to cover your rally, demanding that ACORN be investigated and prosecuted by your local government.  Make sure to obtain permits as necessary.

Investigate your elected officials for their ties to ACORN and, if they are found, disseminate that information and mount a pressure campaign to require your representatives to publicly denounce ACORN.

Please share this information with others. If enough Americans understand ACORN’s corruption and the Obama Administration’s ties to it, it could help slow his Big Government agenda, and defeating Big Government is what SBABG is all about.

Sign up for our RSS feed and become a fan of our Facebook Page. We’ll keep you updated about how Big Government and its corrupt partners work to destroy the rule of law and what you can do to combat them.

To understand why this is, you need only understand the Broken Window Fallacy.

Frederic Bastiat originally formulated the Broken Window Fallacy in his landmark book That Which is Seen and That Which is Not Seen.  Henry Hazlitt then expounded and reformulated it for a more modern audience in his classic work, Economics in One Lesson (which was one of our 31 top resources for small business owners and employees).  In Chapter 2, entitled “The Broken Window,” Hazlitt wrote:

The Fallacy of the Broken Window exposes the lie that, as one Austrian Economist put it, “the … destruction of wealth fuels its creation.”   He then goes on to summarize the Fallacy and concludes:

You can see the absurdity of the position … when you take it to absurd extremes. If the broken window really produces wealth, why not break all windows up and down the whole city block? Indeed, why not break doors and walls? Why not tear down all houses so that they can be rebuilt? Why not bomb whole cities so construction firms can get busy rebuilding?

It is not a good thing to destroy wealth. Bastiat puts it this way: “Society loses the value of things which are uselessly destroyed.”

But Big Government frequently peppers hammers us with the message that we must create new wealth by destroying old wealth!

And that’s where Cars For Clunkers comes in.  Here’s a quick summary of the program and where it goes wrong.

1. The Federal Government takes tax-dollars, or borrowed dollars (to be paid back later through taxes), and offers to hand that money to people who will trade in pre-selected older cars; the money is to be used toward buying a new car; then the government takes the traded-in car off the road, and junks it, often by destroying the engine; the “subsidy” given toward buying the new car (for each trade-in) is $3,500-4,500
2. If the value of the trade-in car is less than the $3,500-4,500 handed in trade value the government has overpaid for the car, despite that the government is about to junk it, thus ensuring that no value will be received in return.
3. If the value of the trade-in car is more than the $3,500-4,500 handed, the government still derives no value from the trade because it’s not reselling it; it’s junking it and stripping it for salvageable parts (which are minimal)
4. The net number of cars on the road remains the same; maybe net emissions drop or maybe fuel-usage drops (because of better fuel efficiency) in the aggregate, but maybe not! (more on that below)

So, in this new version of the Broken Window Fallacy, our modern-day Window Breakers are destroying drivable cars, then handing out confiscated or borrowed money to the people who are allowing their “windows cars to be broken” because other people are paying for these windows cars to be replaced with newer, better, sexier models!

They do this in the name of saving the environment from pollution, or saving on “waste” through fuel-efficiency, or preventing global-warming through reducing emissions, or whatever.  It really doesn’t matter what justification they’re using, it’s wrong on several levels.

It destroys wealth by not letting these cars be used up over their useful life.  It destroys wealth by routing scarce resources into activities – in this case, car building – that wouldn’t otherwise take place, denying other industries access to those resources.  It destroys wealth by taking on liabilities, through borrowing, that have to be paid back later by taxpayers (reducing their purchasing power in the future) or by taxing them immediately (reducing their purchasing power today).

Also, building the new cars emits all kinds things into the atmosphere and gobbles up energy in the production process!   So any gains in emission and efficiency are offset by that, too!

Guess what else proponents of this destruction are missing?

They are oblivious to how the incentives will change future behavior.

These people traded in a car they’ve been likely to drive less.  We can safely assume these cars didn’t get as good gas mileage or were older, “clunkers”, because they were targeted for these reasons.  These cars also may not have been driven at all, or driven rarely.  However, they’ve been used to help people get a vehicle that they’re now more likely to drive more frequently!!!  More driving means more emissions, even if the emission per unit of travel is less.  More driving means more fuel consumption, even if the fuel consumption per unit of travel is less.

See, when you change the incentives, you change the behavior.  The people who owned these traded in cars were incentivized to drive them less by having to pay more for a unit of travel, and by having to conserve the remaining life in the car, which may have been approaching the end of its life over the next 5-10 years.  Now?  Not so much.

In fact, the New York Times reports, “Michael Gerrard, director of Columbia Law School’s Center for Climate Change Law, said in a statement that the cash-for-clunker program is not a cost-effective way to reduce fuel use or greenhouse gas emissions. Any energy savings, he said, could take several years to realize, considering the time it takes the fuel savings from a new car to exceed the energy cost used to make it.

Who are the favored parties?

The subsidized consumers, of course.  But also the favored industries, who have had their goods favored at the expense of other industries.  The government isn’t handing out money to go buy [fill in the blank], yet they’re siphoning off money and resources from a finite supply and putting it into one area, at the expense of other areas.

Think the Auto-Dealers liked it?

Look at this:

Of course!  The “government” should put more money into it.  Let me fix that quote to show you what it should say if it were telling the truth.

Who were the losers?

Everyone else, especially the taxpayers.  And other businesses and industries, especially ones directly impacted by trading these cars in instead of servicing them, auto-parts sellers, mechanics, etc.

The funny thing is that down the road even the dealers will suffer, because this program created false demand and just kicked the can down the road so that the dealers could put off their day-of-reckoning a little longer.

Want to feel some outrage?

Read this story and watch the video, especially watch the video at the 2 minute mark on where they discuss how the cars are junked, and how otherwise re-saleable parts are destroyed in the process.  Perfectly usable cars being destroyed!  And, as an added bonus, Big Government makes a complete mess in administering the program (but don’t worry, they’ll run nationalized health care flawlessly).

We’re not being fooled.  The majority of American people understand that this program is corrupt and just 35 in 100 Americans are in favor of it.

But since we’re living in the age of Big Government, so let’s go all the way with this!

Why stop at cars?  In fact, the Wall Street Journal today asked, Why not a “Cash for Everything” program?

Let’s blow up buildings and rebuild them with subsidies to stimulate commercial building.  Let’s burn down homes and rebuild them with taxpayer funds to stimulate the homebuilding industry!  Let’s break up all our fine-china and buy everyone a new set!

Or maybe not.

Let’s just point out one last thing about the way Cash For Clunkers was run, and how it exposes Big Government hypocrisy.

Very poor people, the car-less among us, who don’t have any private transportation of their own, and who Big Government always profess to help, could have really used those cars.  They could’ve been given to people in need.

This summer I donated my “clunker” to the Kars 4 Kids charity, which then sold it and used the money to help poor children.  I’ll bet you my shiniest nickle that this government program has caused material hurt to charities like Kars 4 Kids.  And not just this year, but also in future years since many cars that may have been later donated to charity had their end-life pushed up to the present day and therefore won’t be available for donation in the future.

Just another sad instance of the Bastiat’s “unseens” or, in words we like to use, “what-might-have-beens.”

The program should probably be called “Cash From Clunkers” since this bunch of Big Government phonies are possessed of such little brain-power that they can only themselves be referred to as Clunkers.  Then again, referring to it as “Cash From Clunkers” also obscures the fact that though they are delivering the money, it’s not their money.  It’s our money.  Or China’s money that they’ve borrowed and we will have to pay back someday.

Anyone suspect that this whole program might just be one ruse to prop up Government Run Motors or as a payback to the Automobile Unions?

Whatever.  It’s corrupt.  Another example – in a long and growing list – of corruption and Big Government going together.

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UPDATES -  Below by Date – how did our predictions go relative to what really happened?  Read the results and decide for yourself.  (N0, we’re not prophets, we just have common sense and an understanding of basic human behavior, mysterious commodities that appear to be absent in politicians.)

UPDATE: October 4, 2009 – Cash for Clunkers Fails to Help Economy and Environment

Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%. Some 700,000 cars were sold in the summer under the program as buyers received up to $4,500 to buy a new car they would probably have purchased anyway, so all the program seems to have done is steal those sales from the future. Exactly as critics predicted.

Cash for clunkers had two objectives: help the environment by increasing fuel efficiency, and boost car sales to help Detroit and the economy. It achieved neither. According to Hudson Institute economist Irwin Stelzer, at best “the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day’s gasoline use.” Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.

UPDATE: October 23, 2009 – Dealers say Cash for Clunkers has made cheap, used vehicles harder to find

In his 20 years in the business, salesman Mark Sauer has never had a tougher time finding inexpensive used cars.

“It’s never been this bad,” said Sauer, buyer and sales manager of Vaccaro’s Auto Buyers of Reading, 805 Hiesters Lane.

“Customers used to be able to find a good car for their son or daughter to take to college for $2,000 or $3,000, but now that same car may cost $5,000,” Tabakelis said. “It’s sad.”

He, too, blames cash for clunkers, which has led to fewer vehicles being available at used-car auctions, and the recession.

“You used to be able to find a decent car for $2,500, and you can’t anymore, especially in the past two months,” said Arie Garcia, the association’s office manager.

Another problem is that used-vehicle prices have quickly risen above their book values, making it tougher for customers to secure financing, Garcia said.

“Cash for clunkers really hurt the used-car industry,” she said. “I think it hurt more people than it helped.”

UPDATE: October 29, 2009 – Taxpayers paid $24,000 per car

The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.

The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

UPDATE: October 29, 2009 – Cash for Clunkers Massively Distorted GDP

If anyone mentions the just-released 3.5% U.S. third quarter GDP growth, just throw this chart in their face. Cash for Clunkers clearly distorted the U.S. economic figures in an unsustainable fashion.

Next quarter, we won’t just be returning to business as usual for auto output. Don’t forget that Cash for Clunkers pulled future auto demand, ie. some of Q4 demand, into Q3. Thus Q4 is likely to be very weak since many people who planned to buy a car in Q4 probably took advantage of Clunkers and bought in Q3.

Next quarter, not only are we unlikely to get Q3’s boost, but motor vehicle output data could subtract from GDP as well. So watch out for the cliff…

UPDATE: March 23, 2010 – Car Sales ($millions) Reported by Dealers

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