O, the Humanity (Reprise)

I cut a lot of slack to politicians when they make predictions. I may think that they're dead wrong when they claim, for example, that lower government spending or higher taxes are the way to solve the debt problem. But they probably aren't "lying", i.e. knowingly spouting something untrue; they may be indulging in wishful thinking---heck, they may even believe with all their heart in what they're saying.

But when politicians say something utterly false--and they know it--concerning past events, the normal reaction is to get angry (perhaps because people don't like the answer to "what kind of fool do you take me for?"). However, the explanations can be so laughable that their ridiculousness disarms us.

Every six months or so the Obama Administration is good for such a howler that I can't be angry at them.

September, 2012 - the attack on the American consulate in Libya, as well as uprisings across the Middle East, was due to an obscure YouTube video. President Obama, on 9/12/12:

"What we do know is that the natural protests that arose because of the outrage over the video were used as an excuse by extremists to see if they can also directly harm U.S. interests."

May, 2013 - the IRS targeting of tea party organizations was the work of low-level agents in Cincinnati:

the IRS has identified two "rogue" employees in the agency's Cincinnati office as being principally responsible for the "overly aggressive" handling of requests by conservative groups for tax-exempt status

October, 2013 - the first reason (the President did list others later in his 10/21/13 press conference) that the Obamacare website doesn't work:

"the number of people who have visited the site has been overwhelming, which has aggravated some of these underlying problems."

An amateur video, Cincinnati IRS agents going rogue, and healthcare.gov being so popular the website froze. Laughter being the best medicine, the President is correct about one thing: because of Obamacare many of us are feeling better already. © 2013 Stephen Yuen

Lisa Benson cartoon

I Won't Pay You, But You Must Pay Me

It has been our experience that most people still do the ethical--and legal--thing by living up to their contractual obligations when dealing with struggling businesses. However, one need not be stupid about it; if the financially troubled business owes us and we owe them money, we "offset" receivables and payables and pay them the net amount, if any. (Landlords netting repairs and security deposit refunds are probably the offset example that is most familiar.)

But offset is not allowed when the other party is the government:

“Tax refunds will not be issued until normal government operations resume,” said the IRS. The IRS emphasized, however, that the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

The IRS won't pay you, but you must continue to pay it or be subject to jail and/or fines.

Those who advocate more government, as opposed to private-sector, provision of services are in for a rude shock when they discover that the devil they threw out is replaced by a devil that is far worse because it doesn't have to worry about losing you as a customer or your poor Yelp review. © 2013 Stephen Yuen

Will Medical Insurance Pay for my Cellphone?

That's not such a far-fetched question, given the increased use of cellphone cameras and apps by patients.

The simple camera phone is epochal in that it puts the power—literally—into the hands of patients. The photographic possibilities extend far beyond the skin. In the pediatric gastroenterology clinic, many concerned parents bring in photos of their kids' dirty diapers, which all parties agree is vastly preferable to bringing in the real thing. Some neurologists recommend that parents make videos of children who have a known history of seizures to help the team fine-tune medication doses. In developmental and behavioral clinics, parents can show videos of their children at home demonstrating milestones like a mature pincer grasp or pulling to stand.

If the insurance company won't pay, perhaps one can still claim an itemized deduction for "medical equipment." The expense shouldn't be hard to corroborate, since the IRS will have copies of all your medical records and photos.... © 2013 Stephen Yuen

No Bombshell

Bombshell: An overwhelming surprise or disappointment: "the news came as a bombshell".

WSJ columnist Peggy Noonan calls the linking of the Tea-Party-targeting scandal to the IRS chief counsel a "bombshell" revelation. That's a misuse of the term, because it's not a surprise at all: how could these actions not have been directed from Washington?

IRS agents, if they want to keep their well-paid jobs with good health and retirement benefits, must follow rules that have been laid out for just about every situation. Delaying applications and singling out a class of taxpayers for extra scrutiny without a tax-related reason are counter to their ethics and procedures; such actions could well result in suspension, termination, and even criminal prosecution.

However, like other members of a bureaucracy, public or private, they'll do what bosses want as long as it's not obviously illegal. If the actions are outside the rule book, they need to get written authorization or may even "kick [cases] upstairs" for the higher-ups to handle. Ms. Noonan is correct in her conclusion, though: "Republicans need to find out how high the scandal went and why, exactly, it went there." © 2013 Stephen Yuen

Who Are You Afraid of the Most?

Brand consultant Jonathan Baskin says that data gathering by private companies "puts the National Security Agency to shame."

From the level of the internet service provider, through to social-media platforms and websites, and including apps, ads and clickable content (like videos), we collect a vast amount of information on consumers' online behavior (and their geophysical location), then use it to tee-up search results, info and ads to millions of people millions of times every day … ideally to each one of them uniquely so. We don't do it to keep anybody safe, however. We do it to sell stuff.

We are long past the point where even the virtuous who think they "have nothing to hide" can ignore the incessant snooping from all quarters. Fearing identity theft, no one freely gives out her social security number or date of birth any more. For various un-nefarious reasons people guard information about their income from co-workers; they are circumspect when talking about their assets with family and friends. But privacy does seem to be a losing battle in the expanding surveillance corporate state.

For all its problems corporate snooping, IMHO, is less bad than that done by the government. If data is lost or misused, private actors are subject to civil and criminal penalties. And for the most part one can still opt out of allowing a bank or social networking site to have access to one's information.

Not so with the government, which, despite the Fifth Amendment, can compel the submission of the most sensitive information and which has prosecutorial power to boot. Who are you afraid of the most? © 2013 Stephen Yuen

The Age of the Philosopher King

The ship has sailed, the barn door is open, the genie can't be put back in the bottle---use whatever metaphor you like. The government knows more about us than we had imagined, and soon, with ever-faster processors, ever-increasing storage capacity, and ever-more-powerful analytical tools it will know everything. If people didn't see this coming ten years ago, they weren't paying attention. But that's beside the point. They can't stop it.

When individuals have enormous power at their disposal, we try to make sure they do not misuse it by imposing physical safeguards (e.g., ICBM's) and legal restraints (e.g., a declaration of war is made by Congress, not the Commander-in-Chief). Systems of control, however, are as imperfect as the human beings who designed them. While improper behavior should be detected and corrected, the first line of defense must be to install people who have a strong ethical code, the right set of priorities (e.g., country before party, other people before oneself) and good judgment.

The American founders did their best to design a political system that did not require its leaders to have a moral character superior to the rest of society. However, when we consider the damage that could arise from the "wrong people" being in charge of, say, nuclear weapons or the Federal Reserve, then the corrective of replacing the government after four years seems woefully inadequate.

We are left with the solution that Plato proposed thousands of years ago, that of entrusting leadership to the philosopher-king:

we must make our guardians philosophers. The necessary combination of qualities is extremely rare. Our test must be thorough, for the soul must be trained up by the pursuit of all kinds of knowledge to the capacity for the pursuit of the highest--higher than justice and wisdom--the idea of the good.

"The idea of the good" is nowhere to be found on the Civil Service application for a job at the NSA. In fact the opposite behavior may well have been evidenced by the IRS. And that is why a lot of people are scared. © 2013 Stephen Yuen

The Fight Was Unfair

Most Americans believe in a fair fight, especially in politics. Though the United States population has grown by a factor of more than 100 since its founding, Americans hold to the ideal of the town hall: let everyone have their say, give people time to think and talk about the issues, vote (in secret, to avoid retaliation), then move on to the business of living.

That's one of the reasons that the use of the Internal Revenue Service to suppress conservative speech has resonated across the country. By refusing to grant conservative organizations exempt status before the election and by illegally leaking the names of conservative donors (thereby subjecting them to harassment), opposition voices were stilled. The fight was unfair.

Peggy Noonan:

Almost a month after the IRS story broke—a month after the high-profile scandal started to unravel after a botched spin operation that was meant to make the story go away—no one has been able to produce a liberal or progressive group that was targeted and thwarted by the agency's tax-exemption arm in the years leading up to the 2012 election.

President Obama may well have won re-election anyway. The partisan use of the enormous powers of the IRS guaranteed it.

"The Worst Tax Season Ever"

A bounce from the bad feelings: ecstasy when it's over.

It's been said that CPA's like our complicated tax system just fine because the system allows them to bring in more revenue. Why is it, then, that many have left or are leaving the tax preparation business? A sampling of comments from the "worst tax season" ever:

easy or quick returns are being done by the taxpayer online.....complicated returns, while expensive to the client, usually work out to a worse hourly rate for the accountant.

The rules don’t get finalized until late in the year. That causes the information to come out later every year. And the financial institutions are issuing 2 and 3 amended reports after the originals are issued. As recently as 5 years ago, I used to do 2/3 of my returns in February. Now the last 2 years I do 2/3 after March 15.

New Mexico Taxation and Revenue and the Department of Workforce Solutions decided to mandate all businesses e-file unemployment, state workers comp fee and witholding for the period ending 12/31/12. The kicker was, the system had never been tested and still doesn’t work. I am still struggling with filing P/R tax reports and penalties assessed because New Mexico can’t get a system that works. More returns on extension than ever before and no end in sight!

Absolutely the worst – a good deal due to Congress late changes and updates requred by IRS and software vendors. But for me mainly due to major software problems with [.....] unrelated to the late updates.

The regulatory state insists that the governed meet all the deadlines that it imposes though it is late holding up its end of the bargain. It does not allow the governed to deviate from the proliferating rules that it refuses to impose on itself. With experienced tax practitioners departing the business, non-expert taxpayers who need outside help have fewer resources to call on and are more likely to make mistakes or, worse, don't bother to comply at all.

And so it goes in the 21st-century land of the free. © 2013 Stephen Yuen

It's Different This Time

Peggy Noonan on why the IRS scandal is different this time, even if other Presidents used the agency for political purposes [bold added]:

The abuse was systemic—from the sheer number of targets and the extent of each targeting we know many workers had to be involved, many higher-ups, multiple offices. It was ideological and partisan—only those presumed to be of one political view were targeted. It has a single unifying pattern: The most vivid abuses took place in the years leading up to the president's 2012 re-election effort. And in the end several were trying to cover it all up, including the head of the IRS, who lied to Congress about it, and the head of the tax-exempt unit, Lois Lerner, who managed to lie even in her public acknowledgment of impropriety.

The Internal Revenue Service may not pack the most firepower (although some of its staff are armed), but it is one of the most powerful and feared government agencies. The IRS has information on nearly every American and has

extensive and unique powers to investigate and examine private records, powers that in many cases contravene the protections otherwise afforded individuals against illegal searches and seizures, self-incrimination, and the right to counsel provided by the Fourth, Fifth, and Sixth Amendments.

Undoubtedly there will be calls for new restraints to be placed upon the IRS. However, the most effective controls will be more than legal; it took generations for venerable institutions like the U.S. Armed Forces, the FBI, and the Secret Service to develop cultures that enabled them to perform professionally (for the most part) no matter who was in charge, and to be circumspect about the use of force.

There is a growing realization that IRS agents, who assume everyone is guilty unless innocence is proved, do not have an institutional ethos to dial back the use of their full power. And when that power is brought to bear exclusively against Administration opponents while supporters are given a pass (though the tax attributes may be similar), then civic society is in danger of flying apart. Peggy Noonan is right: "That is the kind of thing that can kill a country, letting half its citizens believe that they no longer have full political rights." This has got to be redressed, with all deliberate speed. © 2013 Stephen Yuen

In Praise of Divided Government

It's a cliché that the party who holds the White House deplores divided government, while the party out of power likes it very much. The principal objection to divided government is that quick, bold, necessary actions are stymied. To this humble observer that's a feature, not a bug.

When the Democrats had control of Congress and the White House from 2008 to 2010, they passed Obamacare without a single Republican vote. When the Republicans were similarly situated in 2003 to 2006 and part of 2001, they passed the so-called Bush tax cuts, arguably a major source of today's deficit problems. (It should be noted that Democrats were roughly split on the Patriot Act and Iraq War resolutions, so it's a reasonable supposition that even if congressional Democrats had slim control, George W. Bush would have gotten his legislation through, thanks to solid Republican support.)

Now we are seeing another advantage of divided government: congressional hearings on possible Administration malfeasance. Yes, investigations into the current raft of scandals are interfering with Executive Branch operations, and yes, there is grandstanding and partisan obstructionism going on, but there are also important issues at stake concerning the free flow of information prior to a Presidential election (the time when the people have the most say in their government) and the abuse of the enormous powers of the Internal Revenue Service, the agency that has information on everyone and where everyone is presumed guilty, not innocent.

I'd like to see something get done this year on immigration reform and tax simplification, but if inaction is the price we pay for divided government, so be it. © 2013 Stephen Yuen
[Update - 5/31: Ann Althouse on the 2014 elections: "Regardless of how directly Obama is implicated and how much any given voter wants to blame Obama, the scandals make a strong argument for opposite-party control of Congress."]

The Sensibility of House Republicans

No, really, House Republicans may be acting sensibly:

House Republicans say they will not overreach on probing the Obama administration, having learned lessons from investigating the Monica Lewinsky scandal during the Clinton administration. [snip]

Impeachment is not something that has been bandied about around the House GOP leadership table, according to GOP leadership aides and a House Republican member who spoke on background.

Unless there is solid proof of high crimes and misdemeanors (using the people's definition, not lawyers' understanding) by the President, House Republicans should quash all mention of the I-word. Mr. Obama is still popular and could become an object of sympathy if there were a rush to start impeachment proceedings.

It's difficult to imagine that he would ever be as unpopular as his predecessor, but Mr. Obama may well descend to that level after three and a half more years of scandal and ineffectiveness, not to mention being the butt of late-night humor.

Thursday's Jay Leno:

This week will mark the 37th time House Republicans have tried to repeal Obamacare. If Republicans really want to do away with Obamacare they should endorse it as a "conservative non-profit" and let the IRS take it down!

A lot of critics are now comparing President Obama to President Nixon. The good news for Obama: at least he's no longer being compared to President Carter!

If I Weren't Laughing I'd Be Crying Dept.

The IRS' softball team is named the "Cheetahs." James Taranto:

We have to admit, "Cheetahs" is almost as funny a name as Ted Kennedy's dog "Splash."