On Critical Thinking

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By Mike Cronin

A lot of people talk about critical thinking, but I seldom ever see any explanation of what critical thinking is.  Left to our own devices, we might reasonably assume that critical thinking means being critical.  That is partially right.  Certainly people who practice critical thinking are often critical of others, but that is not the essence of the term.

To me, critical thinking means examining my own thoughts on an issue for errors in logic or reasoning before verbalizing them. It means basing my positions on a foundation of rational thought. It means recognizing bias, especially my own.

I’ve written before about bias.  When you read a news article or watch a news piece, the reporters and networks pretend they have no bias, but that is absurd.  Everyone has a bias – it is inevitable, because even the wisest among us cannot see things from every and all perspectives.  The difference between my blog and some others is that I tell you right up front what my bias is.  I am pro-freedom, pro-capitalism, pro-individualism, and pro-reason.  I am against socialism and any other form of collectivism. My biases are not a result of my upbringing.  If anything, my biases are in opposition to the trends and positions espoused to me in school, church, and to some degree, the military.

Logic is another key ingredient of critical thinking.  Ayn Rand described logic as the art of correct identification.  That sounds simple, but it has deep consequences.  It is easy for a child to recognize a lemon as a lemon, but it might be a bit harder for the child to understand that the lemon can never be anything other a lemon.  It can only do or behave as a lemon.  A person might squeeze it to get the juice, or grate it to get the pith, but a lemon cannot become a bird and fly away.

Wishful thinking and other logical errors are the source of much conflict and dysfunction in the world. An example:  The current brouhaha over gender identity.  We are either born with male anatomy or female anatomy (occasions of true androgyny are exceedingly rare). “Identifying” as the opposite gender from what one’s anatomy dictates (no pun intended) is logically erroneous.  One might align their conflicted desires to reality via surgery and drugs, but until those procedures are complete, one is “male” or “female” according to one’s anatomy.

At the heart of many arguments and conflicts over logic are premises.  There is no shortage of pundits, educators, and other influential people that use well-crafted logical arguments that stem from bad premises.  Take “equality” for example.  We might hear that the difference between conservatives and liberals is that conservatives want people to be treated as equal under the law, while liberals want everyone to have equal outcomes.  The first premise rests on the idea that no one is more valuable as a human being than anyone else.  It creates the conditions whereby a poor person can raise themselves up from poverty on their own hard work and merit. It is essentially correct, but hard to enforce, because the rich and well connected can sometimes buy better legal representation than the poor. The second premise rests on the idea that it’s not fair for one person to have more than another, so wealth must be redistributed.  It gives no attention to the concepts that wealth belongs to whomever created it, or that individuals have any responsibility for their own situation.  It is a bad premise, because it ignores the fact that life is not and cannot be fair, and it ignores all of the evidence of human history:  Humans cannot rise above animalism without individual effort to devise technology or apply the technology to raising the standard of living.

Are you a critical thinker?

The Death of Income Taxes

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By  Mike Cronin

Imagine three of your neighbors come to you and tell you that as a group you are all going to vote on raising $10,000 for a playground. You’re don’t have kids, or they are grown and living on their own, so you vote no.  The other three all have kids, so they vote yes…and demand that you pay your “fair” share or they will beat you up.  They also decide that the more money you have, the more you have to pay.  Since you kids have moved out, you have more disposable income than any of them, so your “fair” share turns out to be half of the cost, or $5000, while each of their fair shares turn out to be about 1/6th of the cost, or about $1666 each. The three neighbors enter your house, find your safe, demand you open it, then they take $5000 from you.  They also demand that you assemble paper work that proves you don’t actually owe even more than the $5000, and give it to them by mid-April. You decide that it’s better to pay the $5000 and show proof that you don’t have to pay even more than to get beat up, so you spend several hours digging through your banking documents, and submit your financial “proof” that you paid enough.

The above scenario is a microcosm of how our tax system works today. The majority voted to take the property of the minority and use it to pay for something the minority didn’t ask for and doesn’t need or want. Our current system is confiscatory, that is, your money is confiscated from you. Worse, as your income goes up, so does the percentage the government (i.e. your neighbors) takes from you.

There are few ways you have of influencing the amount that’s taken from you: You can hide money at the risk of getting beat up by your neighbors and having even more money stolen (i.e. income tax evasion); you can make less money so you have to pay less (lowering your income – at the expense of your quality of life); you might find ways to protect some of your money for now in exchange for paying later (like certain retirement plans); and you might try finding different neighbors who will promise (but fail) to steal less of your money (i.e. elect a different set of politicians). Regardless of whatever trick you use to make the taxes a little less painful, you take it for granted that such a parasitical system is a permanent fixture of life.

It wasn’t always like this, and it doesn’t have to stay this way. The modern income tax didn’t become a constant monkey on the backs of Americans until 1913.  Imagine that: from 1776 until 1913, with a few exceptions, our government managed to function without stealing money from us.  It can be that way again.

What if instead of coercing you to pay for a playground (or any other bit of government) you don’t want, your three neighbors find enough like-minded folks to form a corporation, pitch in some seed money to buy or lease land, get the playground built, then they charge a small access fee to use it? No one forces anyone else or intrudes on their financial life. Government involvement is reduced to providing an enforcement tool for the contracts between the playground company and the builders, and providing routine police protection and emergency response. Government stays small, because it isn’t involved in building facilities or providing services that can and should be offered competitively in the private sector.  Your burden is tiny – your sales taxes pay for contract enforcement, emergency response, and the courts.

This method of raising funds for government is called a consumption tax.  You only pay for what you use, and only for how much of it you use. No one steals your money, and you don’t have to prove anything to anyone about your finances.

There have been various proposals for such a system.  The most comprehensive that I’ve seen is called “The Fair Tax.”  You can learn about it here: https://www.youtube.com/watch?v=DsqjW3_5Lhw

The Fair Tax is not perfect, and it has no shortage of critics.  Most of those critics would lose something if the Fair Tax were enacted.  IRS employees would no longer be required. Tax preparation businesses would become obsolete.  If our tax system wasn’t confiscatory and hideously complicated, there would be no reason for that entire industry to exist. Politicians would lose a lot of power under such a scheme. Regardless, the Fair Tax is a system that does not punish productivity or operate via the threat of force, so it is by default better than what we have now!

Random Absurdities, Pt. 2.

 

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By Mike Cronin

It’s OK to kill our (human) enemies, but we dare not name them.  On the other hand, we have no compunction about conducting war against all sorts of things that aren’t enemies: Terrorism is a tactic used by our aforementioned unnamed enemy, but terrorism itself is not an enemy. Drugs are a commodity sold by enemies taking advantage of the risk/reward conditions our drug laws create, but drugs themselves are not an enemy. Poverty is a condition often perpetuated by people who refuse to accept that they are responsible for the choices they make.  Poverty is not an enemy, but the “War on Poverty” often treats the most productive among us as foes.

The “Occupy Wall Street” types who made a stink a few years ago railing against capitalism were often seen wearing name-brand clothing, drinking coffee from famous-brand cafes, and calling and texting each other on smart phones.  How can one accept an anti-capitalist argument from spokes-dudes wading up to their necks in the products, goods, and services created at the hands of some of our most effective capitalists?

Scientifically speaking, anything with a carbon molecule is organic. Virtually all of the food items we eat, with the exception of water, salt, and trace minerals, are organic in the most factual sense possible: they contain carbon atoms and molecules in the structures of carbohydrates and proteins.   The idea that a vegetable or box of cookies or a can of soda might not be legally “organic” when they are factually “organic” is a semantic absurdity fostered by the pipsqueaks of panic.

Ditto for “genetically modified organisms” (GMOs).  Virtually every domesticated food plant and animal produced and consumed today is a result of genetic modification that has been going on since the dawn of agriculture.  Here again, the pipsqueaks are pandering to fear.  It makes no difference to your body if a tomato or grape or a chicken was modified over many generations in the field or one generation in a test tube.  You are going to eat the stuff, draw energy from it, and eliminate it, not blend it into your genetic code. Eating “Franken-food” will not cause you to turn into a shambling mutant!

I am reliably informed that airline pilots for most of the big domestic airlines (American, United, Delta) are paid by the hour, from the time the jet is pushed back from the gate at the departure airport until the door is opened at the arrival airport.  Is it not absurd to incentivize your highest-paid hourly employees to NOT be efficient in an industry with such low profit margins that attention to efficiency is essential for financial success?

The concept of “white privilege” has been instigated as a way to induce guilt in white people for (supposedly) causing, or at least not having to suffer, the woes (real or imagined) of every other demographic. It is a racist concept, and it absurd.  It is racist because it attributes advantage to whites solely on the basis of their skin color.  It ignores the fact that there are many non-white people who attain as many, or more, rewards and advantages in their lives than most whites.  It is absurd when applied to Americans because all of us in the US enjoy far more “privilege” (in the form of better living conditions, more freedom, and more opportunities for some, and sadly, also in the form of government handouts for others) than most people in most countries around the world.  The constant stream of immigrants pouring into this country (legally and illegally) aren’t coming here seeking to be oppressed by the man!

We are supposed to take it for granted that income inequality is a bad thing and accept all kinds of wealth redistribution schemes to help resolve it.  There is never any allowance for the possibility that income inequality might be a direct result of ingenuity inequality or effort inequality. That would mean that people are responsible for their own achievements (or lack thereof).  We can’t have that – it would be absurd!

Taxation without Confiscation

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By Mike Cronin

With income taxes dues in a little over a month and presidential hopefuls in the news every day, now might be a good time to consider some changes to our tax code.  I’ve opined in previous posts that it is not greedy to want to keep what you earn, but it is the essence of greed to want what others have earned.  Our current tax and fiscal policy system is fueled by the greed of politicians who promise things they have no right to give, and by the people who want what those politicians are promising. The primary weapon used for the plunder is income tax withholding, i.e. the taking of your money before you ever see it. This is called confiscatory taxation – your taxes are confiscated from you.

There is a movement afoot to take the government’s power to relieve you of your hard-earned money and put it back in to your hands.  The general idea is to replace the confiscatory income tax with a consumption-based tax – which means taxing you on what you buy and consume instead of on what you make. The most notable proposal for a consumption-based tax system is called the Fair Tax.

The philosophical difference between the confiscatory system we have now and a consumption based system is stark.

The confiscatory system requires the government take money from you by force (i.e. the threat of arrest and punishment for not filing/paying).  It encourages politicians to use taxes to fund elements of the government that have no Constitutional right to exist, and worse, to use taxes to change behavior. It places a huge compliance burden on you and businesses. Lastly, and perhaps most egregiously, it fuels envy politics by allowing demagogues to cry for the rich to pay an ever-increasing portion of the tax bill, while allowing nearly half the population to consume an enormous amount of government benefits and entitlements w/o consequence or motivation to change. Worst of all, the harder you work and the more you produce, the more you are taxed. Americans have accepted this for a while, but we are beginning to wake up and see that punishing productivity is insane – if you want more productivity, jobs, and economic growth.  On the other hand, if you want power over millions, a good way to obtain it is to divide and conquer by pitting the masses with low incomes against the few with extraordinary incomes.

A consumption-based taxation system more closely aligns government revenue collection with the morality most of us follow every day.   First, it allows the taxpayer much more control over how much tax he or she will pay, and it puts the government in the role of beneficiary instead of bully.  Second, it more logically aligns with how we pay for almost everything else in life. (E.g. if we don’t buy much jewelry, then we aren’t forced to pay for jewelry).  A person (or business) with large consumption habits is presumably using more government than someone with low consumption habits. Under a consumption-based taxation system, big consumers will pay more for government than the small consumer, and income will no longer be a factor.  In short, people will pay their taxes in direct proportion to how much they consume instead of how much they make.   This will return some of the power Washington stole from us and put back in our hands. Oh, and it will mean no more 1040s and no more IRS!

Sounds eminently fair to me.

Quantitative Easing or Quantitative Fleecing?

By Mike Cronin

Q: You’ve heard the talking heads talk about quantitative easing, so what the heck is it?

A: Put in the most basic terms, quantitative easing, or QE, is weasel-ese for the Federal Reserve (aka “the Fed”) attempting to stimulate consumption by making up money out of nothing and injecting it into the economy.

Q: What’s wrong with that?

A: Multiple things:

  1. The Constitution gives the government the power to print and coin money. That is one of the functions of the Dept of the Treasury.  The Constitutionality of the government making monetary policy (i.e. manipulating interest rates or “stimulating” the economy) has been debated since the time of Jefferson and Hamilton.  The powers enumerated to the government in the Constitution manifestly do not include allowing it to charter a central bank (which is what the Federal Reserve is), but Congress created one anyway with the passage of the Tenth Amendment in 1913.
  2. The “money” that the Federal Reserve puts into the economy is created out of thin air. The process is convoluted, but the net effect is that the Fed accomplishes QE by changing the balance in the accounts it is “depositing” the money into, i.e. creating electronic “money” out of thin air. The theory is that by giving banks more money (quantitative) to lend at low rates (easing), more businesses will borrow that money and put it to work, which will in turn generate more commerce.  In other words, the economy will have been “stimulated.”  The problem is, after the financial crises in 2007-2009, banks are only lending money to those with top-tier credit ratings.  A great deal of the money that is meant to stimulate commerce has instead stimulated stock trading.  That’s why we can have record stock prices even as the rest of the economy (especially on the employment side) is unspectacular.
  3. Since the value of a thing, including money, is directly related to its relative scarcity, adding hundreds of billions, or even trillions of dollars into electronic circulation reduces, or debases, the value of our already existing money. If the money isn’t worth as much as it used to be, but the value of the things we buy hasn’t changed, the price will have to go up. That’s price inflation.  If your income rises with prices, inflation may not be alarming, but how often do you get a raise just because your money loses value?

Q: If I’m not going to make more money at work, making money in the stock market isn’t so bad, is it?

A: In and of itself, making money on stocks is not bad.  The problem is that there shouldn’t be any QE and there shouldn’t be a central bank!

In reality, instead of stimulating the economy, QE amounts to a second, insidious way to tax you.  The first way is income and capital gains taxes. They are painful, but at least they are overt and articulated in law.  The second is in currency debasement (the deliberate erosion of the buying power of the dollar to increase the amount of dollars moving in the system) by the unelected, unaccountable, and opaque Federal Reserve.  It is not nearly as overt, but it takes value from you just the same.

Stuff I Want My Kids to Know #1: There ain’t no Such Thing as a Free Lunch

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By Mike Cronin

Have you ever heard the phrase “there ain’t no such thing as a free lunch,” often abbreviated TANSTAAFL?  Well, it doesn’t just refer to meals.  It means that whenever something is advertised as “free,” there’s always a catch or a string attached. “Buy one, get one free” doesn’t really mean you get one free, it means you get two for the price of one, or two for half-price each. It might be a good deal, but you are not getting anything free.

It’s the same deal when you are offered a “free” gift or a “free” upgrade when you purchase goods or services.  You are paying for the thing that’s free in the price of the thing that isn’t.

Sometimes you really do get a good or a service for no money, but it still isn’t really free. “Free” software often comes with adware or malware that will cost you time, money, or in some other way cause you stress. Even if it didn’t cost you money, you are still paying for it in other ways.

Many times, the catch or the string is buried in the “fine print.”  All of the big, bold, splashy fonts and bright colors on an ad are just a lure. The legal facts are in the tiny text buried in the middle of the insert or at the bottom of the ad. The fine print section is like the ingredients portion of a food label – it tells you what’s really in there.

The bottom line is that you can’t get something for nothing except in very rare circumstances. One way or another you have paid, or will pay, for what you receive.  That is not necessarily a bad thing.  For example, when you receive a birthday or Christmas present, in a sense, you have already “paid” for it by being a friend worthy of receiving a gift. The trick is to remember TANSTAAFL whenever you are excited about a seemingly good deal.  If it seems to good to be true, it probably is, because you will pay for it one way or another!

Becoming Antifragile: Beyond “Sissy” Resilience | The Art of Manliness

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A bit of useful truth: it is nice to enjoy the abundance we are surrounded by, but it has led to a culture of entitlement. Reliance on entitlement comes at a cost: fragility.

Becoming Antifragile: Beyond “Sissy” Resilience | The Art of Manliness.