One of my favorite economists, thinkers, writers…Frederic Bastiat should be read by all.
Get started by reading “The Law”. It was originally published as a pamphlet in 1850. The Foundation for Economic Freedom (FEE), has many works available for free on its website.
Here’s a link to “The Law”, where Bastiat gave his famous definition of “legal plunder”.
So, happy birthday to Bastiat — and get started reading some fantastic writing about a free society.
We first heard that the GDP contraction of 1% was an anomaly. Now, the Commerce Department has revised its report from the Bureau of Economic Analysis, stating the the GDP fell -2.9% in the first quarter.
Here’s the summary:
“Real GDP declined 2.9 percent in the first quarter, after increasing 2.6 percent in the fourth. This downturn in the percent change in real GDP primarily reflected a downturn in exports, a larger decrease in private inventory investment, a deceleration in PCE, and downturns in nonresidential fixed investment and in state and local government spending that were partly offset by an upturn in federal government spending”.
Exports dropped 8.9%
Real final sales of domestic product dropped 1.3%
Real nonresidential fixed investment decreased 1.2%
Nonresidential structures decreased 7.7%
Equipment decreased 2.8%
Real residential fixed investment decreased 4.2%
The one bright spot? Intellectual property products increased 6.3%
You can read the highlights of the report here, along with the May durable-goods report and business investment outlook.
If we see a negative GDP after the second quarter, we’ll be in recession territory again.
In 2004
You can’t have anyone that stupid be in charge at NBC.
Chuck Todd, who is NBC’s “Chief White House Correspondent” and also NBC’s “Political Director”, is out there mischaracterizing the IRS scandal. To blame it on 501c4s is utterly incomprehensible.
Yesterday on MSNBC’s “The Daily Rundown”, Chuck Todd gave this statement:
CHUCK TODD: Time now for my “Takeaway.” The controversy surrounding IRS may be more than a year old but of course we’re still talking about it. On Monday, the IRS Commissioner testified before Congress. A week after the IRS told Senate investigators that two years of e-mails disappeared in a computer crash back in 2011. While this certainly doesn’t make the Obama administration nor the IRS look very good, it’s important to remember what this actual story is about because it’s gotten lost.
The question at hand is whether explicitly political organizations should be filing as tax exempt social welfare groups under the tax code and both political parties are pointing blame. Republicans say that just conservative-sounding groups were targeted by the IRS. That’s why they want to see the e-mails. Democrats have responded by claiming, hey, liberal groups were targeted, too. But here is the story many are missing. Why should primarily political organizations get a taxpayer exemption, basically get a handout from the tax code? Both sides are in an uproar because they couldn’t take advantage of a borderline shady way to raise money for political purposes or launder money for political purposes.
So while the IRS is certainly not a good guy here they have been terrible about being forthcoming. Are there any actual real victims? Folks, this scandal is not black and white since frankly two wrongs don’t make a right. We know what really is working here for Republicans. Beating up the IRS, good for the base. Good politics there makes for great fundraising e-mails. But let’s remember what the controversy itself is about.
The problem is that Chuck Todd is flat-out wrong. 501c4s are not a way to engage in political spending. They are issue advocacy groups, and always have been — for nearly 100 years. Never until this administration has anyone had a problem with 501c4s.
The real crux of the problem is that the IRS attempting to try to turn issue advocacy — which is a first amendment, free speech issue — into political speech, so they can try to curb it. This was clearly evident in the recent uproar with the IRS trying to re-write the rules on 501c4s, which generated tens of thousands of comments in protest.
The short version is that issue advocacy deals with issues (free speech) and is not “political”, whereas advocating for a candidate or a party is “political”. It may not be a perfect divider, but it has worked quite well, and no one has even suggested anything better.
Proving Chuck Todd to be even more clueless is the fact that 501 c4 organizations do not really get any tax benefits from their “tax exemption”. All a 501c4 is, is a group of people pooling their after tax money to pay for a non- deductible expenditure. There are never “profits”, the receipt of funds from its members is not income, and the expenditure of these funds are not “deductions”. Just as there is no tax effect from an individual spending on issue advocacy, there should be no tax effect from individuals pooling their funds for the same spending. The IRS granting of 501c4 status is just recognizing the obvious.
Chuck Todd is either disingenously preying on low-information viewers to not know the differences between 501c4s and other tax-exempt organizations, or else he really is that stupid. Either way, he should submit his resignation today.
During testimony on June 23rd, the IRS Commissioner could not name a law or statue that he has reviewed to make certain no law has been broken. Rep. Trey Gowdy did the superb questioning.
From the Weekly Standard:
“You have already said, multiple times today, that there was no evidence that you found of any criminal wrongdoing,” Gowdy said. “I want you to tell me: What criminal statutes you have evaluated?”
“I have not looked at any,” the IRS commissioner admitted.
“Well then how can you possibly tell our fellow citizens that there is no criminal wrongdoing if you don’t even know what statutes to look at?” Gowdy followed-up.
“Because I’ve seen no evidence that anyone consciously –”
“Well how would you know what elements of the crime existed? You don’t even know what statutes are in play,” Gowdy said, visibly annoyed. “I’m going to ask you again: What statutes have you evaluated?”
“Uh,” the IRS commissioner stumbled, “I think you can rely on common sense–”
“Common sense? Instead of the criminal code, you want to rely on common sense? No, Mr. Koskinen, you can shake your head all you want to, commissioner. You have said today that there’s no evidence of criminal wrongdoing and I’m asking you what criminal statutes you have reviewed to reach that conclusion.”
“I reviewed no criminal statutes,” said the IRS commissioner.
You can watch the testimony here:
Even though the IRS claims it lost all of Lerner’s emails due to a hard drive crash, as least some of those appear at some point to have been archived (the ones from 2009): As reported,
“House congressional investigators have requested emails from 2009 to 2011, when the IRS division led by Lerner began targeting for extra scrutiny Tea Party and other conservative nonprofits applying for tax-exempt status.
The IRS had a contract with email-achiever Sonasoft in effect at least through 2009, according to the website FedSpending.org.
That same year, the company tweeted: “The IRS uses Sonasoft to back up their servers, why wouldn’t you choose them to protect your servers?”
And a document on the company website suggests its system “archives all email content and so reduces the risk of non-compliance with legal, regulatory and other obligations to preserve critical business content.”
However, whether Sonasoft’s government contract extended through 2011 or if the company had the capacity to save every email from such a large agency remains unclear.”
The saga continues.
In sworn testimony this morning (Friday, June 20th) IRS Commissioner John Koskinen stated that Obama was told about Lerner’s emails in April. This would be 6 weeks before Congress was told.
“The IRS knew in February, or maybe even in March, and Treasury and the White House knew at least in April — but Congress and the American people didn’t find out until June.”
Congress received a letter from the White House on Wednesday informing them they knew about the emails in April, having been informed by the Treasury Department. IRS head, Koskinen, stated he had seen the letter as well.
“He said his “understanding” is that someone in the IRS general counsel’s office informed someone in the Treasury Department’s general counsel office “that there was an issue and the IRS was investigating.”
And yet, in March “Mr. Koskinen told the House Oversight Committee in March, “if you want them all, we’ll give them all to you, though he added that doing so might take years”.
This is worse than Watergate, indeed.