Restricting Private Weapons June 30, 2007Posted by federalist in Government Regulation, Natural Rights, RKBA.
A true Constitutionalist must believe that the federal government should not ban private ownership of military weapons. Most people think it’s utter lunacy to contemplate an individual being allowed to buy things like grenades, or a 155mm howitzer. To me it is perfectly legitimate.
Consider the case of motor vehicles. We let almost anyone — even minors and felons — purchase and operate cars that carry a combustible payload of fuel and which can easily weigh three tons and travel over a hundred miles per hour. When aimed correctly a single passenger vehicle in a single collision is capable of killing many people and destroying hundreds of thousands of dollars in property. Cars greatly enhance the ability of criminals to steal the property and lives of other people. So how can a society full of car drivers survive? Two simple rules make this work:
- Every vehicle is registered to an owner, and it is very easy for law enforcement to trace a car used incorrectly to its owner.
- Every vehicle owner has to post and maintain a bond to cover the potential misuse of his vehicle. Typically he does this through a third-party insurance contract, though (at least in some states) owners can “self-insure” by convincing the regulator that he has enough money to cover reasonable liabilities.
How can a polite society permit unrestricted weapons ownership? Well the first key point is that only responsible citizens enjoy full liberties. If you are a child, a felon, or certifiably insane then you already lack the right to keep and bear arms. Do we need to worry about a wealthy individual having a bad day and lobbing his registered grenade into a crowd of innocent bystanders? Or about his teenage son taking the grenade to school? Probably not if there’s a six-figure bond covering the use of that grenade, and especially not if chemical tracers can irrefutably finger him as the device’s owner and put him in jail for criminal negligence.
Would criminal gangs be unstoppable if they could keep a main battle tank in their hideout? Again, somebody with full rights would have had to register that weapon system and post a huge bond to insure against its misuse. I.e., a responsible party is on the hook. It’s not like somebody is going to drive a tank downtown and fire a few 120mm rounds without people noticing where it came from.
What about the most extreme case, a thermonuclear bomb? We could perhaps exempt high-yield nuclear weapons from private ownership simply because they are strategic, not tactical — or more saliently, they are fundamentally a terrorist weapon.
Returning to more practical considerations, one may wonder why we should contemplate private ownership of powerful weapons. What legitimate role could they play in a stable democracy like ours? I guess this may be where Principled thinkers diverge from Pragmatic ones, but in principle I know that only tyrranies need to disarm responsible individuals. I also know that even stable societies can break down — sometimes only temporarily — and the fact that we are enjoying a period of peace and prosperity doesn’t mean that chaos is impossible. If citizens with property want to invest in private arsenals, either for their own amusement or as insurance against a marauding mob that the state isn’t in a condition to beat back, why should our society show preference to the mob? Especially when a registration and bonding regime is capable of adequately dealing with weapons of every caliber.
It may surprise many Americans to know that the federal government actually does allow individuals to buy things like grenades or working artillery pieces. Our laws, together with the executive Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) draw amusingly arbitrary lines on weapons ownership:
- “Armor Piercing” bullets are illegal to manufacture or import. The criteria for what this ban encompasses are too complex to mock in this space. (However there is still an existing supply of legal bullets manufactured before the ban. Since the ban fixed the supply tungsten core rifle bullets now cost upwards of $1 apiece. Who buys them? Probably speculators.)
- Individuals cannot own any machinegun manufactured after May 19, 1986. (As a result of this fixed supply the market for legal machineguns is very expensive: The cheapest now sell for at least $4000, and popular models like the M-16 are now around $12000. Again, many owners are now investors.)
- Any firearms with shoulder stocks have to have a barrel of at least 16″ and overall length of 26″, or else they have to be purchased as an NFA item. (NFA items, named in the National Firearms Act, can be legally purchased by individuals as long as they register the purchase and pay the “Transfer Tax,” which for most items is $200.)
- Shotguns with barrels shorter than 18″ are NFA items.
- Any gun with a bore diameter over half an inch is considered a “Destructive Device” (DD) unless it’s a “shotgun suitable for sporting purposes” or a muzzle-loaded firearm. “DD”s are a special class of NFA items that are often more harshly restricted by state laws.
- The feds will let you buy a grenade, as long as you register the device and pay the $200 tax (that’s per grenade).
- A suppressor (“silencer” — actually, any component that can be readily used to construct a firearm silencer) is treated as an NFA firearm.
- Interstate commerce in “switchblade” knives is also prohibited, except to the military or to people with only one arm.
Note that criminals can easily modify many non-NFA firearms to create short-barrelled or automatic weapons for less than $200. Meanwhile, law-abiding citizens can buy grenades and commission 155mm howitzers if they pay a $200 registration tax, but they cannot legally buy new machineguns or “armor piercing” bullets for any price.
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Richard Epstein in today’s WSJ explains just how bad the Supreme Court’s decision was in Hein v. Freedom From Religion Foundation. By ruling that taxpayers can’t challenge their government for overstepping its bounds they struck a heavy blow against key forces that would restrain government.
At stake is whether judicial review itself remains as a check on the political branches. Blocking taxpayer standing often leaves no one to challenge congressional or presidential actions as inconsistent with our basic constitutional design — allowing both branches to act in areas where they have no constitutional authority.
The Car of the Future — Today! June 28, 2007Posted by federalist in Energy, Transportation.
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I love energy efficiency just as much as the next guy, which is why I’m always fascinated by improved engine technologies. A good idea makes so much sense that it doesn’t need massively distorting government subsidies or mandates to be marketable.
Last year I noted Hydraulic Hybrids. Today I came across Ethanol-Boosted Turbochargers. As Technology Review explains, this concept boosts the efficiency of gasoline engines by 30%. How can you get more energy out of gasoline? First, by raising the compression ratio you can extract more energy from combustion because you increase the expansion ratio of the hot byproducts. Second, by extracting more energy from the same space you can use smaller engines, which lose less energy to friction. (Ever wonder why the same car with a bigger engine has a lower mileage rating? It’s almost all due to waste heat in the engine.)
Social Security — Try to Calculate Your Benefits! June 27, 2007Posted by federalist in Economic Policy, Government, Retirement, Taxation.
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I would invite anyone who believes in Social Security to try to calculate their expected benefits based on what they have paid in. This is actually an amusing exercise which I recently undertook to answer the following question: If you haven’t paid any social security taxes in your life, what is the least you can pay in to get the maximal return from the Social Security system?
Computers Offer Productive Recreation June 26, 2007Posted by federalist in Energy, Human Markets.
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I love the idea of distributed computing projects that harness idle computer processors for computationally intensive projects. However the proliferation of power-saving technology has reduced the attraction of this sort of spare-cycle application: Since computer processors idle their power consumption when they aren’t being used it is no longer completely free to put them to work.
Wouldn’t it be great if we could harness the computational power of all the human brains that idle away hours playing completely unproductive games of solitaire and minesweeper? Humans are unparalleled for many useful computational tasks. Luis von Ahn at Carnegie Mellon is a pioneer in capitalizing that fact. Google is putting his technology in practice. There is also research into exploiting the enormous subconscious computing power that every person carries.
Congress Imitates Homer Simpson June 22, 2007Posted by federalist in Energy.
As people gradually realize that burning food for fuel (i.e., corn-based ethanol for gasoline) isn’t such an economical plan, I am reminded of Homer Simpson who, on discovering that there is a market for waste grease, bought and cooked a side of bacon, fed the meat to the dog, and eagerly took the grease to a recycling plant.
Homer: Okay, boy. This is where all the hard work, sacrifice, and painful scaldings pay off.
Employee: Four pounds of grease … that comes to … sixty-three cents.
Bart: Dad, all that bacon cost twenty-seven dollars.
Homer: Yeah, but your mom paid for that!
Bart: But doesn’t she get her money from you?
Homer: And I get my money from grease! What’s the problem?
Franking Sense June 20, 2007Posted by federalist in Government.
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I was outraged today to receive what appeared to be a campaign mailing from my “Honorable” Congressional Representative bearing the fine print, “This mailing was prepared, published and mailed at taxpayer expense.” How thoughtful. My “representative” spent some of my tax money to remind me about all the hard work he’s doing for me. The 40-pound oversized cardstock was a nice touch, as was the professional layout and the beautiful color offset printing.
There’s a picture of him on each side of the mailing, which apparently went to every single residence in his district. His name appears eight times, not including the URL for his web site which is helpfully featured on both sides. With free publicity like this, how can an incumbent candidate lose?
After digging into this abuse I learned that Congress itself regulates the expenditure of tax money on mailings — known as the “franking privilege.” There are legitimate reasons for this, which Congress itself eloquently expresses in 39 USC Section 3910:
It is the policy of the Congress that the privilege of sending mail as franked mail shall be established … in order to assist and expedite the conduct of the official business, activities, and duties of the Congress of the United States.
What follows is a case study in why government has to be restrained: From this simple policy follows 2500 words of U.S. law outlining “The Intent of Congress” in this policy, which is further elaborated into a 72-page “Franking Manual,” which is maintained by the House Commission on Congressional Mailing Standards. Indeed, from a 44-word policy Congress proceeded to carve out so many rules and loopholes that my Representative’s propaganda could be produced and mailed at my expense and still comply with the letter of the law.
Department of Unintended Consequences — Part IV June 16, 2007Posted by federalist in Taxation.
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Proof that you can’t arbitrarily raise taxes to create government revenue is noted by Jason Furman:
[T]the United States has the second highest corporate tax rate in the OECD but the fourth lowest corporate tax revenue as a share of GDP in the OECD. Moreover, something is wrong when the effective tax rate on equity-financed corporate investment is 36 percent but the effective tax rate on debt-financed corporate investment is -6 percent.
Ask Your Broker: Where Is Your Short Interest Rebate? June 14, 2007Posted by federalist in Finance.
When you sell a stock short your broker borrows shares, sells them on your behalf, and collects cash in return. That cash sits somewhere collecting interest. You should get a cut of it. But unless you’re a customer of Muriel Siebert or Thinkorswim you won’t see a cent.
Institutions (especially long/short funds) look forward to the “short rebate” of this interest after the broker has covered the costs of borrowing shares. It can make a market-neutral portfolio nearly costless to finance. I was surprised to learn how hard it is to earn this rebate as an individual investor. Following are brokerages that do NOT pay any short rebate:
Ameritrade Banc of America ETrade Fidelity Firstrade Interactive Brokers Marsco OptionsXpress Schwab Scottrade Tradeking USAA Vanguard
The best broker in terms of money rates is Siebert: They will pay 1.875% (currently; floats with the Fed Funds rate which is currently 5.25%) on any short credit balance, and will even negotiate higher rates for large balances. Meanwhile they charge a margin rate of at most only 75bp over the Broker Call rate (currently 7%) and offer a competitive money-market sweep (currently 4.45%).
Thinkorswim, which specializes in options and derivatives, offers a 1.75% rebate on short balances above $100k, with up to 2.25% on balances over $1MM. They sweep at Fed Funds – 125bp, and margin at 225bp over Fed Funds.
Shareholder Rights June 11, 2007Posted by federalist in Economic Policy, Finance, Taxation.
Shareholder activism and the evangelism of dueling academics like Lucian Bebchuk and Stephen Bainbridge have renewed the question of whether current laws do enough to secure shareholder rights. In theory, Shareholders elect Trustees who oversee corporate Officers who are responsible for performance of a company. It sounds like it should be a little democracy where the motto is “one share one vote.”
In practice many corporations are structured so that Shareholders get little say in anything other than whether they’re happy with the status quo. Trustees often end up more beholden to the Officers they are supposed to be policing. Activist Shareholders have been crying foul as they discover that they can’t always effect the changes they want through shareholder votes.
But the real “shareholder vote” was always supposed to be one’s right to sell shares and take one’s capital elsewhere. And here we find the real rub: Institutional shareholders may have that luxury, but individual investors generally do not. If they sell then they have to pay capital gains taxes. I.e., there is a tax on the ultimate shareholder vote!
Real shareholder activists should be agitating for tax reform.
… Back to Federalism
This is a convenient point to note that the federal government has not only encroached upon the ultimate shareholder vote, but has also trampled the ultimate citizen’s vote: The right to vote with one’s feet.
If federalism were respected in this country then we would have fifty competing governments, each with the ability to offer a significant political alternative to its citizens. Those who are unhappy with their current government could cast their electoral votes to change it, but they could also vote with their feet by moving to a state that more closely represented their interests.
Lamentably, since the federal government has usurped many powers that belong to the states, U.S. citizens have lost that right. No matter which state you move to, the political regime is largely the same. It’s as if there were only one company you could invest in. Kind of communist, isn’t it?
Fine Water June 10, 2007Posted by federalist in Uncategorized.
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Ever since I read this review of a gallon of milk on Amazon I have enjoyed the subtle sarcasm in the blurbs that accompany those specialty restaurant menus for wine, martinis, single-malt scotch, etc. I hit the jackpot on an NCL cruise where I found a four-page “Water menu.” It listed bottled waters by bubbliness, and included such gems as the $11/liter “Ramlosa” from Sweden, “Discovered in the late 1800s by accident while drilling for coal, this water was later analyzed and proven to be as pure and rich in minerals as the most famous waters of Europe.”
Nevertheless, I think it’s fair to devote a little bit more attention to drinking water. Time magazine this week has a feature on “Fine Water” that is both amusing and illuminating:
[A]bout 75% of the fine-water experience is mouthfeel–basically, how many bubbles there are and how big they are. Some 20% comes from how dense the liquid is with minerals such as calcium and magnesium–which, to my shock, is listed on the side of most bottles as the TDS: total dissolved solids. The remaining 5%, Mascha claimed, comes down to pH balance: slightly alkaline waters taste sweet; acidic ones have a tinge of sourness.
Dolphin Racing June 9, 2007Posted by federalist in Open Questions.
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OK, I know this is the weekend of bizarre ideas, but I got to swim with bottlenose dolphins today at Discovery Cove and watch them perform at Sea World, and I’m wondering why dolphin racing isn’t an established sport. After all, we race horses, camels, and dogs. Dolphins are magnificent marine mammals — not only intelligent and social, but also extremely fast and easily capable of carrying people through the water. I even watched a pair take a harness and pull a man standing on their backs. It’s a wonder that none of the Arabian billionaires have stepped up to sponsor and train their own pod for harness racing.
Futurist: Smart Walls June 8, 2007Posted by federalist in Energy, Open Questions.
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I’m not very keen on “futurists,” but today I’m taking a break from my contempt for them to offer my own vision of the future: Smart walls. Future walls will be insulated, sturdy modular panels capable of controlling every phase and frequency of electromagnetic radiation. Plug them into a central control and they will:
- Pump heat from one side to another, providing optimal heating and cooling of rooms with no hotspots.
- Offer high-resolution emission of visible light, so that any spot on a wall can provide not only space or task lighting, but also can serve as a video display.
- Selectively transmit visible light, so that a window can be opened anywhere on any wall, and can be dimmed or shaded electronically.
- Transmit power wirelessly to other devices that can work off of resonant current.
I.e., walls will now be the feature of a living space, instead of dumb dividers pockmarked by power and data outlets, ducts, lights, and switches. And users will no longer be constrained by the static placement of receptacles and windows.
Europe Imitates Anthem June 6, 2007Posted by federalist in Economic Policy.
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Brian Carney, in an article on government approaches to global warming, notes a profound difference in the philosophies between Europe and America:
[T]he characteristic American response to, say, climate change, is to believe that technologies— and even companies—that do not now exist will crop up to solve the problem, assuming there is a problem. The characteristic European response, as exemplified by the German conspiracy theorist in Venice, is to focus on how to get the businesses to behave “better.
Anyone who remembers Ayn Rand’s Anthem will find this comment particularly salient:
Most European employment law is focused on preserving the jobs that already exist. Policies designed to create new jobs are viewed as threatening to the status quo….
Tapping Waste Heat June 5, 2007Posted by federalist in Energy.
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We are surrounded by heat differentials that represent usable energy, but that currently go untapped. All of our generators, fuel engines, and electric devices throw off waste heat. The amount of waste can be astonishing — for example, piston engines aren’t even 30% efficient! But waste heat doesn’t have to be wasted: Physicists are demonstrating thermoacoustic electric generators (with no moving parts!) that can convert some of this (maybe 20% at best) back to electricity.
Jennifer Ouellette’s blog puts this in context with a fascinating review of acoustic energy technology, from sonoluminescence to sonofusion.
Unlock Adolescent Productivity June 3, 2007Posted by federalist in Education, Human Markets.
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Society has essentially locked up the human capital of teenagers, putting adolescents in a sort of limbo where they are unable to participate productively in society. Robin Moroney summarizes Robert Epstein’s thoughts on this:
Today’s schooling and child-labor laws worked well in the late 19th century, when factories brutally exploited young workers, and a lifetime of education had to be packed into the start of life. A century later, the laws serve only to divorce teens from the adult world.
“They are free to spend, to be disrespectful, to stay out all night, to have sex and take drugs,” says Dr. Epstein. “But they’re not free to join the adult world, and that’s what needs to change.”
Parents who want to give their children “responsibility tied to significant rights” have few ways to do it. States have been increasing restrictions on teens since the 1960s. Having raised the drinking age, some states are considering prohibiting teens from attending parties where alcohol is served, even if they’re not drinking. Parents have few ways to resist such infantilization, other than by assigning household chores, which tends to increase household conflict.
Dr. Epstein recommends giving teens more options, privileges and responsibilities. He believes we should see schooling as a lifetime project, rather than something only for the young. He would allow some teens to work and set up businesses while still in school. He recommends establishing tests that teens could take to prove they’re competent to assume responsibilities like owning property or running a business, the way they can now if they want a driver’s license.
Hedge Fund Replication: Nuts! June 1, 2007Posted by federalist in Finance.
In the year since Lo and Hasanhodzic floated the idea of hedge fund replication, a.k.a. hedge fund cloning, there has been plenty of discussion debunking the concept. But a lot of it gets bogged down in statistical minutiae.
What astonishes me is that major players keep on rolling out replication products — Goldman Sachs’ Absolute Return Tracker, Merrill Lynch’s Factor Index, Deutsche Bank’s Absolute Return Beta Index, JP Morgan…. This is either naive or sarcastic, as a simple explanation should show: