Merry Capitalistmas! Is the free market the reason for the season? What's in the News with stories on job security for judges, federal government hacking states, e-cig updates, good cop fired, Obamacare, and the IRS. Also, a Muh Roads segment on a city in Georgia that is privatizing all the things, and a Statists Gonna State segment on CEO pay.

WHAT’S RUSTLING MY JIMMIES 

[1:28]

Christmas is just around the corner, and it's a time of joy and cheer for most people, especially retail stores and product manufacturers. This is the time of year that our society goes into full force and celebrates that which is most important, private property, voluntary exchange, and mutual benefit. Yes, Christmas is a libertarian holiday if there ever was one.

And yes, I know, you're going to say that I'm not a fan of the word capitalism and that I much prefer the term free market. Of course, you're right, but Merry Free Market-Mas doesn't fit as well as Merry Capitalistmas. So, forgive me my bit of indulgence this time, please.

WHAT'S IN THE NEWS 

[5:40]

In finally a truthful statist news, a Harris County Texas Magistrate doubled a woman's bail from $1,000 to $2,000 because she responded to his questions with “Yeah” instead of “yes.” Another magistrate told a woman given a $3,500 bond for release over several vehicle violations (including driving without a license) that the fact she was caught up in this system of arrests and fines counted as “job security” for him.

In the government eats itself news, according to Georgia’s Secretary of State Brian Kemp, foul play was discovered when a hacker failed at attempting to breach the firewall that protected the Georgia voter’s registration database. The IP address in question was discovered to originate from the Department of Homeland Security itself.

In smoke 'em if you got 'em news, the nation's top doctor is sounding the alarm on e-cigarettes, especially when used by teens and young adults. “These products are now the most commonly used form of tobacco among youth in the United States, surpassing conventional tobacco products, including cigarettes, cigars, chewing tobacco and hookahs,” wrote Dr. Vivek H. Murthy, the US surgeon general, in a report released Thursday. In fact, use of e-cigarettes among high school students increased by 900% from 2011 to 2015, according to the report.

This is what's happening in our country while the Royal College of Physicians in the UK says that vaping is saving lives and will generate significant health gains, and the National Health Service in the UK is set to begin prescribing vaping devices early next year to help people get off of analog cigarettes that are proven to kill people. A recent expert independent review published by Public Health England (PHE) says that e-cigarettes are at least 95% less harmful than smoking, and more importantly, that there is no evidence that e-cigarettes are acting as a route into smoking for children and non-smokers. 

In where are all the good cops news, a Marine veteran and police officer who refused to shoot a man has been fired.

In health care news, House Republicans, responding to criticism that repealing the Affordable Care Act would leave millions without health insurance, said that their goal in replacing President Obama’s health law was to guarantee “universal access” to health care and coverage, not necessarily to ensure that everyone actually has insurance.

In I shit you not news, a “Marxist” “collectivist” “worker-run” restaurant in Grand Rapids, Michigan, closed its doors after customers complained that they could no longer tolerate the bizarre hours, high prices and long lines. 

In the IRS is cancer too news, the Internal Revenue Service now has the ability to revoke the passport of anyone who is delinquent on their tax debt.

And, what will the IRS do with the money they get when they hold your passport for ransom? they'll spend it on renting million dollar townhomes and luxury hotels, of course. In 2015, taxpayers paid for IRS employees to rent million-dollar townhomes and luxury apartments and covered hundreds of nights at the Ritz Carlton and other five star hotels.

MUH ROADS 

[21:25]

I haven't done one of these segments in a while. The idea behind this segment is to discuss privatizing industries that are generally done by government. And, in Sandy Springs, GA, they are going all out on this. Sandy Springs is an Atlanta Suburb with nearly 100,000 residents that is taking its operations private. And in a big way!

STATISTS GONNA STATE 

[27:18]

The Portland, Ore. city council passed a law Wednesday that will charge businesses a higher tax rate if their chief executive officer gets paid more than 100 times what the average worker at the company does.

Normally, businesses in the city pay a tax of 2.2 per cent of their net income to city hall. But the new law will slap a higher rate on any publicly traded companies in the city if their executive compensation is wildly out of line with what workers at the company earn.

Starting in January, an extra 10 per cent tax will be levied if the CEO makes more than 100 times the average salary at the company. If he or she makes more than 250 times, the added tax is even higher — an extra 25 per cent.

I bid a Merry Capitalist to all, and to all a good voluntary life.

 

Read Full Transcript

TEASER INTRO

Merry Capitalistmas! Is the free market the reason for the season? What's in the News with stories on job security for judges, federal government hacking states, e-cig updates, good cop fired, Obamacare, and the IRS. Also, a Muh Roads segment on a city in Georgia that is privatizing all the things, and a Statists Gonna State segment on CEO pay.

INTRO

“Welcome to The LAVA Flow, channeling the flow of information to the Libertarian, Anarcho-capitalist, Voluntaryist, and Agorist community. Find us at thelavaflow.com. Here’s your host, Rodger Paxton.”

Thank you for joining me this week, coming to you from the state that was the home of the first aerial passenger tram, built in Franconia Notch in 1938, this is the show that will bring you the people, places, and events that everyone in the liberty revolution needs to know. You can catch me on Twitter @TheLAVAFlowPod.

This is episode fifty-two, The Merry Capitalistmas Edition, and its Tuesday, December 20th, 2016, when at least XXXXX people have been killed by police already this year. What's Rustling My Jimmies this week? You're about to find out! Let’s Do It To It!

WHAT’S RUSTLING MY JIMMIES

Christmas is just around the corner, and it's a time of joy and cheer for most people, especially retail stores and product manufacturers. This is the time of year that our society goes into full force and celebrates that which is most important, private property, voluntary exchange, and mutual benefit. Yes, Christmas is a libertarian holiday if there ever was one.

And yes, I know, you're going to say that I'm not a fan of the word capitalism and that I much prefer the term free market. Of course, you're right, but Merry Free Market-Mas doesn't fit as well as Merry Capitalistmas. So, forgive me my bit of indulgence this time, please.

To see the fact that capitalism is the theme of Christmas, we have to look no further than the anti-capitalism book, "A Christmas Carol." The bad guy of the story is, of course, Ebenezer Scrooge, a miserly and joyless man who is extremely wealthy. We are led to believe in the book that he is so miserly as a result of his wealth and that the way to be happier is to give that wealth away. While this is utter bullshit, what we can draw from this story is that, without Scrooge being a capitalist and without him having the wealth he had, he would never have been able to pay for Tiny Tim's medical treatment, or to donate to charity. It is precisely because he is a capitalist that any of this is possible. None of what he did after learning the error of his ways would have been possible for a poor man. And, even better, we realize that Scrooge did all of this out of the goodness of his new heart, not because he was forced to at the point of a gun in the form of taxation. This, my friends, is the free market at work.

The capitalist nature of the season is also evident in the store shelves that begin putting Christmas stuff out earlier every year, it seems. Many people complain about this practice, but stores wouldn't do it if the shit didn't sell. Would stores open an entire isle or an entire department of their stores for things that don't sell? Of course not. They do it because they make a shit ton of money from it. We are a consumer driven economy. What the consumer wants, the consumer generally gets. I'm still waiting for the $100 Lamborgini, but I'm sure it will happen one day. If you want Christmas stuff to stop coming out so early, stop buying the stuff so early. If the stores have shelves that aren't moving product, they will change those shelves out for something that does move. This is simple economics.

Here in the seacoast area of New Hampshire, which we lovingly call the Freecoast, we have a yearly get-to-gether called Capitalistmas, which is where I got the idea for this show. Basically, what we do it we each buy a gift for ourselves and we wrap it. We then open it in front of all of our Freecoast family. The great thing about this is that we don't even have to feign excitement or hide our disappointment. We can always say "it's EXACTLY what I wanted!"

This isn't to say that we shouldn't still give gifts to those we love. I don't give gifts to people out of any form of expectation or requirement. I do it out of love and charity. Not for any altruistic reasons, but because I enjoy the feeling I get when those that I love and those who are in need receive a bit of warmth in their lives. It is in my rational self-interest to give to those I love and to those in need. And, it is precisely because of the nature of the free market that I have the means to do both.

As Ayn Rand said about Christmas:

The best aspect of Christmas is the aspect usually decried by the mystics: the fact that Christmas has been commercialized. The gift-buying . . . stimulates an enormous outpouring of ingenuity in the creation of products devoted to a single purpose: to give men pleasure. And the street decorations put up by department stores and other institutions—the Christmas trees, the winking lights, the glittering colors—provide the city with a spectacular display, which only “commercial greed” could afford to give us. One would have to be terribly depressed to resist the wonderful gaiety of that spectacle.

So, go and enjoy, and even celebrate Capitalistmas yourselves, because, without some semblance of a free market, there would be very little for us to celebrate.

WHAT'S IN THE NEWS

In finally a truthful statist news, a Harris County Texas Magistrate doubled a woman's bail from $1,000 to $2,000 because she responded to his questions with "Yeah" instead of "yes." Another magistrate told a woman given a $3,500 bond for release over several vehicle violations (including driving without a license) that the fact she was caught up in this system of arrests and fines counted as "job security" for him.

Job security for the government. Yes, believe it or not, that is exactly what we are. And, this is a much greater impact on the poor in our society. One lawsuit against Harris county said:

In Harris County, wealthier arrestees are released from custody almost immediately upon payment of money to the County. Arrestees who are too poor to purchase their release remain in jail because of their poverty. On any given night, over 500 people arrested for misdemeanors languish in the Harris County Jail because of a money bail that they cannot afford. Between 2009 and 2015, 55 human beings died in the Harris County Jail awaiting trial after being unable pay the amount of money demanded by the County for their release.

On behalf of the many other arrestees subjected to Harris County's unlawful and ongoing post-arrest wealth-based detention scheme, Plaintiffs challenge in this action the use of secured money bail to detain only the most impoverished of misdemeanor arrestees. Harris County's wealth-based pretrial detention system violates the Equal Protection and Due Process Clauses of the United States Constitution. It has no place in modern American law.

This is a huge problem in many places in this country. If you're poor, it's easy to end up in this cycle and to be a revolving-door cash cow for the state. And what can you do about it? You can't afford an attorney to help you. You can't pay the fines. So you're stuck, and the statists know it.

In the government eats itself news, according to Georgia’s Secretary of State Brian Kemp, foul play was discovered when a hacker failed at attempting to breach the firewall that protected the Georgia voter’s registration database. The IP address in question was discovered to originate from the Department of Homeland Security itself.

Kemp said he has “sent a letter to DHS Secretary Jeh Johnson demanding to know why." He also said, "it’s outrageous to think about our own federal government is doing this to us. We’re demanding answers to some of these questions, you know? Are they doing this to other states? Was it authorized or not? Who ordered this? Why is it being done and why weren’t we notified?”

While this could have been a case of an advanced hacker using IP masking of some sort, this would mean the hacker likely had control of a system at the Department of Homeland Security that was the gateway for this attack on the Geogia firewall. Either way, this looks really bad for DHS.

In smoke 'em if you got 'em news, the nation's top doctor is sounding the alarm on e-cigarettes, especially when used by teens and young adults. "These products are now the most commonly used form of tobacco among youth in the United States, surpassing conventional tobacco products, including cigarettes, cigars, chewing tobacco and hookahs," wrote Dr. Vivek H. Murthy, the US surgeon general, in a report released Thursday. In fact, use of e-cigarettes among high school students increased by 900% from 2011 to 2015, according to the report.

Specifically, among middle and high school students, use of e-cigarettes has more than tripled since 2011, the report indicates. Meanwhile, after a period of relative stability from 2011 to 2013, vaping among young adults between 18 and 24 years old more than doubled from 2013 to 2014.

And, of course, no report from a statist would be complete without asking for more regulation. In the report, the surgeon general called for federal, state and local action immediately, such as including e-cigarettes in smoking bans as well as significant increases in taxes and the price of e-cigarette products. There's an urgent need, Sward said, for the FDA "to protect the kids and young adults and indeed the public from e-cigarettes, especially when it comes to flavors." Sward also says they are pushing for 21 to be the age when purchasing all tobacco products is allowed, instead of the current age 18.

So, let's do it for the children! Hold onto your wallets, folks. And, in one of the most draconian parts of this, Ray Story, president of the Tobacco Vapor Electronic Cigarette Association, said, "An industry without regulation is really not an industry," adding that his industry has been pushing for "age verification, GMP standards, and obviously all the products being tested and complying with the regulatory limits that have been set. We don't support unregulated products in the marketplace." What the actual fuck? Here is a guy supposedly representing the industry who says they need more regulation? He is literally asking for the boot on his neck to push a little harder. Can someone fire this asshat, please?

This is what's happening in our country while the Royal College of Physicians in the UK says that vaping is saving lives and will generate significant health gains, and the National Health Service in the UK is set to begin prescribing vaping devices early next year to help people get off of analog cigarettes that are proven to kill people. A recent expert independent review published by Public Health England (PHE) says that e-cigarettes are at least 95% less harmful than smoking, and more importantly, that there is no evidence that e-cigarettes are acting as a route into smoking for children and non-smokers.

As much as I hate to say this, it appears the the UK is light years ahead of the US on common sense and logical approaches to this issue.

In where are all the good cops news, a Marine veteran and police officer who refused to shoot a man has been fired. The officer, Stephen Madar, was called to a domestic disturbance and arrived by himself on the scene. The suspect, Ronald Williams was in the front yard of the house with his hands behind his back. Williams said, "And I say, ‘Show me your hands,’ and he’s like, ‘Naw, I can’t do that,’ ” Mader told NPR. “I said, ‘Show me your fucking hands.’ And then he brings his hands from behind his back and puts them down to his side. And that’s when I noticed he had a silver pistol in his right hand."

But Mader refused to shoot him. An Afghan war veteran, he had been trained by the military to only shoot when you see hostile intent. He says he didn’t see that from Williams. Instead, he tried to de-escalate the situation. “For me, it wasn’t enough to kind of take someone’s life because they’re holding a gun that’s not pointed at me,” Mader said.

But when backup arrived, all they saw was the two men with guns: Mader’s pointed at Williams, and Williams waving his around. One of the responding officers fired four shots, including a fatal one that struck Williams in the side of the head.

Mader was right. There wasn’t a clip in Williams’ gun. Inside the house with their child, his girlfriend had told the dispatcher, “My ex-boyfriend’s here. He has a gun. He doesn’t have a clip in the gun. There’s no clip in the gun. He’s drunk. He’s drunk. He took the clip out of the gun and he said he was going to threaten the police with it just so they would shoot him. He does not have a clip in the gun.”

But the dispatcher failed to relay that information to responding officers.

A month later, Madar he received a notice of termination that also included details of two other perceived infractions. “If I had maybe 30 more seconds, maybe it would’ve went different,” Mader said in the NPR interview. “Maybe I could have talked him down and just put him in handcuffs that night.”

If you want to know where all of the good cops are, they are being fired left and right for doing the right thing, or for speaking up against bad cops. Stephen Madar is a good cop.

In where are all the good cops news, a Marine veteran and police officer who refused to shoot a man has been fired. The judge advised the president-elect on how to scope out the best candidates based on intellectual, ideological, and temperamental qualities.

“He was interested in a broad range of ideas and attitudes about the type of person who would best fill Justice Scalia’s seat,” Napolitano said.

Of course, the best candidate for a Supreme Court Justice would be Judge Napolitano himself. Maybe this meeting is a pre-cursor to that actually happening! We can only hope.

In health care news, House Republicans, responding to criticism that repealing the Affordable Care Act would leave millions without health insurance, said that their goal in replacing President Obama’s health law was to guarantee “universal access” to health care and coverage, not necessarily to ensure that everyone actually has insurance.

“Our goal here is to make sure that everybody can buy coverage or find coverage if they choose to,” a House leadership aide told journalists on the condition of anonymity at a health care briefing organized by Republican leaders. Republicans have an “ironclad commitment” to repeal the law, the aide said, as lawmakers moved to discredit predictions that many people would lose coverage.

“There’s a lot of scare tactics out there on this,” said Representative Kevin Brady, Republican of Texas and chairman of the Ways and Means Committee. “We can reassure the American public that the plan they are in right now, the Obamacare plans, will not end on Jan. 20,” the day Donald J. Trump will be inaugurated.

Republicans still haven't decided what the new laws and regulations will look like yet, and it's very likely that many of the provisions in Obamacare will still be around in the replacement law, including the requirement to keep adults as old as 25 on their parent's insurances and the requirement to cover pre-existing conditions.

In I shit you not news, a “Marxist” “collectivist” “worker-run” restaurant in Grand Rapids, Michigan, closed its doors after customers complained that they could no longer tolerate the bizarre hours, high prices and long lines.

The restaurant’s business model, which did not allow for bosses or managers, promised a “living wage” to all employees and a strong union, did not allow the restaurant to make enough profit to stay in business. People frequently noted on the restaurant’s Facebook page that they waited more than 40 minutes for a sandwich—and that’s when the diner was even open. Because the employees set the shop’s hours by group decision, the restaurant opened and closed at random times, leaving potential sandwich buyers totally confused.

Customers also complained that the restaurants “equal pay, no tipping” scheme failed to reward exceptional service, pointing out on the message board that “you shouldn’t try running your business on political good will alone.”

So, in a no-win situation, and discovering first hand the troubles that have plagued Communism for more than a century, the restaurant was forced to close its doors. Turns out that bread lines, or in this case, pizza lines, are actually a feature, not a bug, of communism.

In the IRS is cancer too news, the Internal Revenue Service now has the ability to revoke the passport of anyone who is delinquent on their tax debt. No leaving the country for you, serf. You are a prison in this country until you pay your debt. No matter if you need to leave the country to work so you can pay your debt. Supposedly, this is only if you owe more than $50,000 in tax debt, but I'm sure that will be a pretty fluid number if the IRS is behind it, especially since that $50k can include penalties and interest. Administrative details are scant. It could mean no new passport and no renewal. It could even mean the State Department will rescind existing passports.

The State Department will evidently act when the IRS tells them, and that upsets some people. We think of passports when traveling internationally, but some people may find that passports are required for domestic travel in 2017. That could make the IRS hold even more serious. The list of affected taxpayers will be compiled by the IRS.

And, what will the IRS do with the money they get when they hold your passport for ransom? they'll spend it on renting million dollar townhomes and luxury hotels, of course. In 2015, taxpayers paid for IRS employees to rent million-dollar townhomes and luxury apartments and covered hundreds of nights at the Ritz Carlton and other five star hotels.

A Senate Finance Committee report on long-term IRS travel released Thursday found that the 27 agents who traveled for more than half the year cost taxpayers, on average, $1.4 million per person. More than half of the travel expenses logged by those employees were for visits to Washington, D.C., and many times the IRS paid for luxury lodgings that the committee called "excessive and inappropriate."

Terry Milholland, the former chief technology officer for the IRS, spent 168 days during fiscal year 2015 at the Grand Hyatt in Washington, D.C., costing taxpayers nearly $39,000. The hotel, located off H Street just blocks from the White House, boasts "spacious rooms that are cosmopolitan and sleek," featuring "infinite luxuries."

According to the Senate report, Milholland would routinely commute to Washington on Monday mornings and stay at the Grant Hyatt through Thursday, when he would turn to his home in Texas. Even though the Grand Hyatt is located within walking distance of the IRS Building and a Metro station, Milholland would take a taxi from the hotel to work every morning, running the meter for more than $1,500 during the year.

Another employee—who was not identified by name or position—shacked up at the Ritz Carlton in Pentagon City, Virginia, and left taxpayers with a $43,000 tab. The same employee spent another $29,000 in the same year at other D.C. area hotels, because you can't spend every night at the Ritz Carlton, or else it will start seem less magical.

Not to be outdone by their colleagues, two of the employees highlighted in the report skipped the luxury hotels and opted instead to stay in luxury apartments. One of them rented a $1.07 million four-bedroom townhouse in Arlington, Virginia, for a year at a rate of more than $4,900 per month. The other split his or her time between Washington, D.C., and Chicago, renting luxury apartments in both cities, with the leases apparently overlapping. The employee's Washington, D.C., apartment cost taxpayers more than $3,100 per month for nine month, while the Chicago apartment cost more than $4,600 per month during an 11-month lease.

At least the money stolen from you at gun point isn't being wasted. It's going back into the economy in the form of IRS agents living like movie stars. Keynesian economics at its finest, ladies and gentlement.

And, in some personal news, I am in the middle of buying a new house that we will be closing on likely next week. This means there will be a couple of weeks where I may not get to a spurt, and it may mean that I may have to push the next episode of The LAVA Flow back one week, or give you an abbreviated episode. I'm going to do my very best for that not to happen, but depending on which day we actually close and can move into the new house, I may need some flexibility. I have to be out of our current rental by the end of the month, and our current projected close date is December 30th, which gives me almost no time to make it happen, and then the unboxing begins. So, as you can imagine, New Year's weekend will be quite hectic for me and I may not have the time to get to that episode over that weekend.

Keep us in your thoughts over the next couple of weeks. This house purchase has been a complete and utter nightmare for us, and I'm hoping this last stage of moving goes smoothly. If it does, it will be literally the only part of the process that has gone well. Wish us luck!

MUH ROADS

I haven't done one of these segments in a while. The idea behind this segment is to discuss privatizing industries that are generally done by government. And, in Sandy Springs, GA, they are going all out on this. Sandy Springs is an Atlanta Suburb with nearly 100,000 residents that is taking its operations private. And in a big way!

The entire operation of city hall is housed in a generic, one-story industrial park, along with a restaurant and a gym. And though the place has a large staff, none are on the public payroll. O.K., seven are, including the city manager. But unless you chance into one of them, the people you meet here work for private companies through a variety of contracts.

Applying for a business license? Speak to a woman with Severn Trent, a multinational company based in Coventry, England. Want to build a new deck on your house? Chat with an employee of the Collaborative, a consulting firm based in Boston. Need a word with people who oversee trash collection? That would be the URS Corporation, based in San Francisco.

Even the city’s court, which is in session on this May afternoon, next to the revenue division, is handled by a private company, the Jacobs Engineering Group of Pasadena, Calif. The company’s staff is in charge of all administrative work, though the judge, Lawrence Young, is essentially a legal temp, paid a flat rate of $100 an hour.

With public employee unions under attack in states like Wisconsin, and with cities across the country looking to trim budgets, behold a town built almost entirely on a series of public-private partnerships — a system that leaders around here refer to, simply, as “the model.”

Cities have dabbled for years with privatization, but few have taken the idea as far as Sandy Springs. Since the day it incorporated, Dec. 1, 2005, it has handed off to private enterprise just about every service that can be evaluated through metrics and inked into a contract.

To grasp how unusual this is, consider what Sandy Springs does not have. It does not have a fleet of vehicles for road repair, or a yard where the fleet is parked. It does not have long-term debt. It has no pension obligations. It does not have a city hall, for that matter, if your idea of a city hall is a building owned by the city. Sandy Springs rents.

The town does have a conventional police force and fire department, in part because the insurance premiums for a private company providing those services were deemed prohibitively high. But its 911 dispatch center is operated by a private company, iXP, with headquarters in Cranbury, N.J.

Does the Sandy Springs approach work? It does for Sandy Springs, says the city manager, John F. McDonough, who points not only to the town’s healthy balance sheet but also to high marks from residents on surveys about quality of life and quality of government services.

Initially, and for the first five and a half years of its life, Sandy Springs used just one company, CH2M Hill, based in Englewood, Colo., to handle every service it delivered. Mr. McDonough says CH2M saved the town millions compared with the cost of hiring a conventional public work force, but last year Sandy Springs sliced the work into pieces and solicited competitive bids.When the competition was over, the town had spread duties to a handful of corporations and total annual outlays dropped by $7 million.

To dissuade companies from raising prices or reducing the quality of service, the town awarded contracts to a couple of losing bidders for every winner it hired. The contracts do not come with any pay or any work — unless the winning bidder that prevailed fails to deliver. It’s a bit like the Miss America pageant anointing the runner-up as the one who will fulfill the winner’s duties if, for some reason, Miss America cannot.

“In most cases, Miss America serves her whole term,” Mr. McDonough says, warming to the analogy. “But every once in a while something happens and they don’t have to run a whole new competition.”

The privatized approach saves money, he continues, because corporations hire superior workers and give them better training. Work handled by 15 public employees can be done by 12 privately employed workers, he says: “It’s all about the caliber of employee and the customer focus that comes out of the private sector.”

During a tour of city hall, Mr. McDonough bumps into Kevin Walter, the deputy director of public works. Mr. Walker has good news. Currently, Sandy Springs pays for two people to operate two road maintenance trucks five days a week — in effect, 10 days of work every two weeks. Well, Mr. Walker has just figured out a way to reduce the number to nine days every two weeks, saving $50,000 a year.

Does Mr. Walker, or rather his company, URS, get to keep a portion of that $50,000?

“No,” Mr. Walker says. “But I get to keep my job. Our job is to run all these projects and programs very efficiently.”

And your contract?

“It is renewed every year,” Mr. Walker says.

“It can be renewed every year,” Mr. McDonough clarifies.

“It can be renewed every year,” says Mr. Walker, correcting himself.

Any anxiety that you will not be renewed?

“No,” Mr. Walker says. He quickly reconsiders. “A little bit,” he says. “Enough so that we do an excellent job.

And this, my friends, is the crux of the issue. Privatize all the things and bring competition to where it's never existed and you will see massive cost savings and superior quality workmanship. Here's to hoping the privatization bug that bit Sandy Springs will bite many more cities soon.

And, this is why it's important for libertarian minded individuals to seek local offices as well. Yes, I know all of the press and glamor and glitz is there for the major races, but the places where we can make the most impact on our every dya lives is in local offices. This is also where we have a much better shot of actually winning elections. If you can get on a school board or a city council and convince the rest of the body to begin privatization, we can see major changes in a big way and save us all a lot of money.

STATISTS GONNA STATE

Portland, Ore., city council passed a law Wednesday that will charge businesses a higher tax rate if their chief executive officer gets paid more than 100 times what the average worker at the company does.

Normally, businesses in the city pay a tax of 2.2 per cent of their net income to city hall. But the new law will slap a higher rate on any publicly traded companies in the city if their executive compensation is wildly out of line with what workers at the company earn.

There are currently about 550 publicly traded companies including Wells Fargo, Walmart and General Electric that have operations in the city, and they paid city hall a collective $17.9 million last year in taxes.

But starting in January, an extra 10 per cent tax will be levied if the CEO makes more than 100 times the average salary at the company. If he or she makes more than 250 times, the added tax is even higher — an extra 25 per cent.

"When I first read about the idea of applying a higher tax rate to companies with extreme ratios of CEO pay to typical worker pay, I thought it was a fascinating idea," said Commissioner Steve Novick, who championed the bill after seeing similar efforts in Arizona and California. "[It was] the closest thing I'd seen to a tax on inequality itself."

Yep, this is really the way these people think. They believe that taxing inequality is the surest way to achieve equality. But, do we really want our CEOs to be equal to non-CEOs? Of course not.

CEOs are paid for producing results. If they don't produce results, they get replaced by someone who does. But the reason they get paid so much is because they produce amazing results.

The proof is in the numbers. Between 1980 and 2003, the average CEO in America's 500 largest companies rose sixfold, adjusted for inflation. Outrageous? Not to investors. The average value of those 500 companies also rose by a factor of six, adjusted for inflation. In 2005, for example, Exxon Mobil reported $36 billion in profits. Its former chairman, Lee R. Raymond, retired that year with a compensation package totaling almost $400 million, including stock, stock options and long-term compensation. Too much? Not to Exxon's investors, who enjoyed a 223% return over the interval, compared to the average 205% return received by shareholders of other oil companies, a premium of about $16 billion. Raymond took home just 4% of that $16 billion. And this is just one story of hundreds or thousands like it.

CEO pay doesn't come out of the average employee's pocket. CEOs make money, not by taking away from the company, but by creating wealth in the company. A CEO can make a minor change in a major company and see dividends of tens of millions of dollars in the pockets of shareholders. This doesn't come at anyone else's expense. In fact, if pay comes out of anyone's pocket's, it's the owners of the company, not the employees. Hiring talented leaders who can make major changes to a company requires paying them competitive prices.

It's a case of supply and demand. Anyone can flip burgers or cook french fries for McDonalds. It is a very low skilled job. Being the CEO and being responsible for everything that happens in the company requires a lot more skill. A CEO also needs the skill of being able to make major decisions that could have a major impact on the company as a whole. A CEO can literally run a company into the ground if they aren't skilled. A fry cook can't do that. The skills required to be a CEO are in high demand, but they are in very short supply. As with any commodity in short supply but high demand, the costs go way up for that commodity. CEOs are no different.

The people paying the CEOs, the owners of the company, the sharholders, think they're worth it, and frankly, that's all that should matter anyway.

OUTRO

Thank you for listening to the show this week. As always, I need to thank my favorite Christmas shopper, Jessica, for her help with this show. For the show notes to this episode, where I put links and other information that has been on this show, go to thelavaflow.com/51.

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Until next time... keep striking the root.

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