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Subject: The Straw

Back on September 17th, during his weekly radio address, President Obama proclaimed that Americans must finally start paying their "fair share" in order to reduce the federal deficit. Of course this is all just verbal misdirection used to hide the fact that what he is actually talking about is merely another run at one of the most important goals of his administration — wealth redistribution — from those who have earned it to those that covet it, with the ruling government class taking their usual handling fee in the process.

And who is it that is not paying their fair share? Of course it is certainly not the virtuous bottom 50% of wage-earners who contribute little to nothing in income and payroll tax. (The bottom 47% pay no income tax at all, and that is precisely what makes them virtuous!) No, according to Obama, it's the greedy, cheating, wealthy households and businesses — the now famous 1% — that have been holding out on the rest of us, and justice demands that they must finally be forced to pay up.

And how are the top 1% fleecing us? By currently carrying only 40% of the total income and payroll tax burden (up from 18% in 1980). And if you increase that pool to the top 1.5% of households, representing the magic $250,000 income number, then that group pays roughly half the total. (For more details, see this article.)

So one is forced to ask, in Obama's mind just what level of tax burden does he deem to be fair to impose upon that small minority of Americans? Is it sixty percent? Seventy percent? More? He never tells us, because there is no hard and fast answer. For Obama, merely earning more than someone else is all the evidence required to condemn that person and justify the use of government force to confiscate their ill gotten "surplus."

Billionaire businessman Warren Buffett seems to agree with Obama's egalitarian philosophy, and famously issued his call to "Stop Coddling the Super-Rich", demanding that the government raise taxes on him and other wealthy people. Taking up the cause, a group of twenty-four "Patriotic Millionaires" descended upon the Capitol to demand that Congress raise taxes on the wealthy in order to deal with the serious federal budget deficits and growing national debt. And just how serious were they? When confronted by reporter Michelle Fields of The Daily Caller (video below) and offered the opportunity to use their great wealth to make a voluntary debt reduction contribution to the Treasury Department, they all refused. And neither can I recall Buffett volunteering some or all of his fortune towards that end. It does make one wonder whether these patriots are truly concerned about the debt. Or instead, is it possible that their actual motives are not quite so altruistic, having more to do with seeing the chains restricting the freedom and property rights of others pulled ever tighter, even if it ends up impacting them as well?

    "Patriotic Millionaires?"

In 1957, the author and philosopher Ayn Rand published the novel Atlas Shrugged, depicting the consequences that inevitably result from government intervention in the realm of economics. As that story unfolds, we see the government exerting more and more control over business activities. However, instead of achieving the promised improvement, we observe conditions continuing to deteriorate at an ever accelerating pace. As government policies tie the hands of competent business leaders, making it increasingly difficult for them to act on their independent judgment and in service of their own goals, we do not find them running to the politicians and begging to be altruistically sacrificed on the pyre of subjugation as we witnessed with our patriotic millionaires. No. Possessing far too much integrity to abase themselves in that way, these men and women decide to go on strike by simply disappearing and leaving the problems of managing economic production to those who condemn them for their ability to successfully do so.

Over the past few years more and more people have been shocked to see in how many ways Atlas Shrugged has proved to be prophetic in anticipating the specifics actions and consequences that have resulted from bad political actions driven by an underlying evil philosophy. And the idea that men of ability, when pressed too far would choose to strike, is one literary device that has dramatically presaged today's reality. As Rand put it in a conversation between her characters, Francisco d'Anconia and Hank Rearden:
    "If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down upon his shoulders-what would you tell him to do?"

    "I . . . don't know. What . . . could he do? What would you tell him?"

    "To shrug."

Here are some examples of real-life strikers in action:

Stealing from the rich isn't an idea original to Obama; people have been trying it ever since Ogg caught his first wild boar and Yuup decided that he would like his "fair share" of that. But hiring a group of thugs, called "politicians", and getting them to do all the hard work for you was certainly a civilizing advancement! In 2008, the Maryland "Yuups" identified their "Oggs", and they were called millionaires. Here's what happened, as reported in the Wall Street Journal:
    Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

    One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.

Push too hard on your victims, and just like Keyser Söze, "Poof, they're gone!"

On occasion, a few of these individuals will make public the reasons for their departure, similar to the radio address delivered by John Galt towards the end of Atlas Shrugged. Here are excerpts from two such letters:
    Good Bye and Good Luck, by former Illinois state senator, Roger Keats.

    As we leave Illinois for good, I wanted to say goodbye to my friends and wish all of you well. I am a lifelong son of the heartland and proud of it. After 60 years, I leave Illinois with a heavy heart. BUT enough is enough! The leaders of Illinois refuse to see we can't continue going in the direction we are and expect people who have options to stay here. I remember when Illinois had 25 congressmen. In 2012 we will have 18. Compared to the rest of the country we have lost 1/4rd [sic] of our population. ...

    We live in the most corrupt big city, in the most corrupt big county in the most corrupt state in America. I am sick and tired of subsidizing crooks. A day rarely passes without an article about the corruption and incompetence. Chicago even got caught rigging the tests to hire police and fire! Our Crook County CORPORATE property tax system is intentionally corrupt. The Democrat State Chairman who is also the Speaker of the Illinois House and the most senior alderman in Chicago each make well over a million dollars a year putting the fix in for their client's tax assessments. ...

    Our home value is down 40%, our property taxes are up 20% and our local schools have still another referendum on the ballot to increase taxes over 20% in one year. I could go on, but enough is enough. I feel as if we are standing on the deck of the Titanic and I can see the icebergs right in front of us. I will miss our friends a great deal. I have called Illinois home for essentially my entire life. But it is time to go where there is honest, competent and cost effective government. We have chosen to vote with our feet and our wallets. My best to all of you and Good luck!

    Why I'm Leaving New York, by Tom Golisano, Chairman of the Board of Paychex, Inc.

    I love New York. But how much should it cost to call New York home? Decades of out-of-control budgets, spending increases and relentless borrowing have made New York simply too expensive.

    Politicians like to talk about incentives — incentives for businesses to relocate, incentives to buy local and incentives to make smart decisions. After reviewing the 2009 budget, I have identified the most compelling incentive of all: a major tax break immediately available to all New Yorkers. To be eligible, you need only do one thing: move out of New York state.

    Last week I spent 90 minutes doing a couple simple things: registering to vote, changing my driver's license, filling out a domicile certificate and signing a homestead certificate — in Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually.

    That savings doesn't include that Florida has a 6 percent sales tax, compared to New York's 8 percent or more. Florida has lower utility taxes and lower gasoline taxes. The Florida homestead certificate guarantees my property taxes will not grow more than 3 percent. ...

    It's not an easy decision, but I'm being forced away from my family and friends, a pain shared by too many parents and grandparents in this state.

    I'm leaving. And by domiciling in Florida, I will personally save $13,800 every single day. That's a pretty strong incentive.

    Like I said, I love New York, but I'm not going to pay New York more for the waste, corruption and inefficiency that is New York state government.

The same story has played out over and over again in New Jersey, New York, Rhode Island, Illinois and elsewhere. And it's not just wealthy individuals, but entire businesses which also look to relocate when the burden becomes too great. As reported in CNN Money:
    Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.

    And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison.

    Companies are "disinvesting" in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California.

Or another example from the Wall Street Journal:
    Late Tuesday night, Democrats in the Illinois house and senate rammed through Governor Pat Quinn's 67% hike in the state income tax and a nearly 50% jump in the state corporate tax. The increase will add $1,400 to the average family's tax bill, and we doubt it will help job creation in a state that has lost 374,000 jobs since 2008.

    New Wisconsin Governor Scott Walker immediately rolled out a press release inviting Illinois businesses to decamp to the Badger State, contrasting his agenda to reduce taxes and welcome business with the Illinois increase. Indiana Governor Mitch Daniels added: "We already had an edge on Illinois in terms of the cost of doing business, and this is going to make it significantly wider."

Contrary to what progressive state politicians repeatedly try to tell themselves, so long as alternatives are available, intelligent individuals and businesses will not merely sit back and "take it", but will continue to pursue what is in their best interest. When one state acts abusively, there are 49 other possibilities to explore in order to locate a healthier environment. However, when the federal government gets involved in imposing its punitive taxes and regulation across the entire country, then options become much more limited, difficult and costly. For certain large scale industries and very wealthy individuals, there may be the possibility of moving business or investments offshore. But in many other cases, the problems created by political intervention simply outweight all of the alternatives. The tipping point is finally reached, and the most sensible path is to simply call it quits — a phenomenon that has been accelerating in recent years and has come to be known as "Going Galt".

In the Tri-City Herald we here the story of Bob Bertsch:
    It took Bob Bertsch 25 years to build his construction business and just a day for it all to go away.

    Bertsch, 65, said he is down-sizing because the tax burden got too expensive to stay in business.

    "I am tired of carrying all the tax load," Bertsch said. "I renew 13 licenses here every year just so I can spend money in this city."

    Bertsch makes no attempt to conceal his frustration with the costs government imposes on small businesses like his.

    "Government is killing small business. We used to have 24 employees at our peak. Now, all of those people who used to work here are in unemployment lines," he said.

On David McElroy's Blog, he recounts the words of Alabama coal mine operator Ronnie Bryant who, after having listened to two hours of business-bashing by the public, environmentalists and politicians, had this to say:
    My name's Ronnie Bryant, and I'm a mine operator. I've been issued a [state] permit in the recent past for [waste water] discharge, and after standing in this room today listening to the comments being made by the people ... [pause]

    Nearly every day without fail — I have a different perspective — men stream to these [mining] operations looking for work in Walker County. They can't pay their mortgage. They can't pay their car note. They can't feed their families. They don't have health insurance. And as I stand here today, I just ... you know ... what's the use?

    I got a permit to open up an underground coal mine that would employ probably 125 people. They'd be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What's the use? I don't know.

    I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there's so much opposition to these guys making a living, I feel like there's no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I've decided is not to open the mine. I'm just quitting. Thank you.

Zero Hedge posted the letter that hedge fund manager Ann Barnhardt sent to clients, announcing the closure of her business. Excerpts follow:
    Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

    It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

    The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets — because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy. ...

    Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. ... What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. ...

    I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform.

The Hazleton, PA Standard Speaker reports that Dr. Frank C. Polidora, an orthopedic surgeon, quits:
    A Hazleton doctor is resigning from the medical staff of St. Luke's Miners' Memorial Hospital, Coaldale.

    Dr. Frank C. Polidora, a longtime Hazleton orthopedic surgeon, blames the passage of the Patient Protection and Affordable Care Act in March for his decision. He has been on the hospital's staff since 2003.

    "The Democrats' 'passage' of OBAMACARE on March 21, 2010, was the final straw," Polidora wrote in his resignation letter to William Crossin, chief executive officer of St. Luke's-Miners. The resignation is effective Saturday.

    Contacted Thursday, Polidora said his decision to leave had nothing to do with the hospital, a facility he praised. Rather, it was about following his own principles. ...

    "To be a true physician, one must be moral. To be moral requires freedom, both political and economic. The freedom of the physician has been lost by degrees over the last 45 years," he wrote in his letter. "OBAMACARE has totally destroyed this freedom, especially as it applies to a hospital practice." ...

    "I fear for the future of the hospital as those in power in our country are seeking to replace the practice of medicine, the profession of healing, with an industry that produces health, but who will, intentionally or not, create a process that removes the unhealthy," Polidora said in his resignation letter.

The Wall Street Journal discusses Thomas Depping's decision to close Main Street Bank:
    Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business.

    In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.

    Mr. Depping plans to set up a new lender that will operate beyond the reach of banking regulators — and the deposit-insurance safety net. ... "The regulatory environment makes it very difficult to do what we do," says Mr. Depping. ...

    Bankers have long complained about their overseers, but it is rare for a bank to basically close its doors aside from an acquisition or failure. Mr. Depping blames the move on a tightening regulatory noose.

Jerry Della Femina tells his story in the East Hampton Independent:
    In the beginning it was a dream. I would own a restaurant in East Hampton. It would be a warm, beautiful place with great food and wonderful service. It would become one of the most popular restaurants in the Hamptons. ...

    So why am I selling one of the most successful restaurants in East Hampton? In 2008 I watched Barack Obama run over Hillary Clinton to become our President. From the very first "Yes We Can" and "Change You Can Believe In," I decided that this country was falling in love with an attractive, great-speechmaking hustler/socialist who, if he got into office, was going to pursue his agenda to destroy the best health care in the world and re-distribute wealth. Yours and mine. I told my friends that from that moment on everything I owned — my houses, my advertising business, my newspaper and my restaurant — was for sale. ...

    Why does this so go against my grain? Maybe it's because of where I've come from to get to where I am. I've been broke, so broke with a wife and kids and no job that I had to borrow money from my parents, who didn't have it for themselves but always managed to come up with it for me.

    I got lucky and worked day and night and built a great advertising agency. I have employed thousands of people in my lifetime. I've been good to them and they have been good to me.

    I'm just not ready to have my wealth redistributed. I'm not ready to pay more tax money than the next guy because I provide jobs and because I work a 60-hour week and I earn more than $250,000 a year.

    So why am I dropping out? Read a brilliant book by Ayn Rand called Atlas Shrugged, and you'll know.

For every newsworthy story of an individual or business that decides to throw in the towel, there are untold others that go unreported. Many businesses — and sometimes entire industries — are destroyed by a burden of taxes and regulations that simply cannot be borne in a market-driven economy. This much is at least clear to some.

But what gets little discussion is the psychological toll that all of this government intervention takes. What few seem to understand is that for the small minority who are prepared to accept full responsibility for themselves — living by their own thought, judgment, goals and actions — each unreasonable tax is not merely a burden, but is seen to be a gross injustice; every new piece of legislation is another set of circus hoops through which one is forced to jump; regulations are a leash, and every regulator a self-appointed master with a whip in hand. For the independent man or woman, government intervention attempts to reduce them from their stature as fully human, to some form of caged beast under the constant control of others.

Government intervention is the supreme demotivator!

It hammers away at passion. It undermines creativity. It erodes drive and the will to succeed. It destroys the joy found in action and the pride realized through success.

To put it simply, it drains the fun out of life.

In an attempt to place a monetary price tag on our economic losses, enormous energy is invested by bureaucrats, analysts, pundits and the media in calculating debt ratios, unemployment levels, energy costs, borrowing fluidity, and any number of other metrics. All the while the real price being paid — the total loss of human motive willpower — dwarfs all of those calculations, but goes unacknowledged. Go back and reread the stories above and look for what they all have in common. These once productive individuals, all of them wealth and job creators, have pulled the plug on their endeavors. And why? Because, thanks to government intervention, they can no longer find the joy that their work once brought them. The rewards of hard work have been lowered while the costs have increased, to a point where further effort is no longer justified — at which point, it's time to shrug.

If you see the issue in this light, then you can understand why, when Ayn Rand spoke of the struggle for our future, she did not describe it principally in economic or political terms, but instead framed it as something much more important: a moral battle — a fight for the true nature and soul of mankind. At its most fundamental level, each person must strive for their passion — their joy — their happiness. And they must oppose anything that stands in the path of those pursuits.

Today, the greatest obstacle standing in our way is a government that has escaped its constitutional straitjacket and become an oppressive monster, injecting itself into every crevice of our lives. If we are to move forward along a path to where we once again can assert ourselves as individuals, in full control over our own destines, then it is imperative that each political action we take be directed squarely at that goal. Half-hearted stop-gap measures will not solve this problem, and are in fact, partly responsible for what led us to this moment. It is time to apply the ultimate litmus test to every statement uttered by every person aspiring for political office:

Does this candidate articulate a consistent set of well defined policies that support my personal independence? If he accomplishes the things he is proposing, will this maximize the opportunity to pursue my life passionately, allowing me to set my own goals in service of my own definition of happiness?

I suggest that if you cannot respond with an unreserved "Yes!", then this is not a candidate worthy of your support. Reject him or her and seek out another who has earned the right to represent you by demonstrating that they fully understand and respect the right to your personal independence.

Never compromise when extending your political support, for doing so is simply an indirect way of compromising on your own life, your values, and ultimately your joy. Always consider just what you demand of yourself when pursuing your goals, and then be sure to never settle for anything less from those in whom you are prepared to vest with political power as your representative. This is the only strategy that has any long range hope of correcting our current situation. Anything less is a recipe for our continued cultural descent.

P.S. 01-06-12:
    Here is a link to an article by Hungarian entrepreneur Andor Jakab, who explains in detail precisely why he's not even considering getting started building up a new business. The final straw can break some before they even get out of the gate!

    This Is Why I Don't Give You A Job
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