You Didn't Build That Bridge, Mr. President

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I was so distracted by the president's demeanor as he was reproaching the business community that his words didn't quite register. I had to go back to read what he actually said, and it was worse than I thought:

“If You’ve Got a Business – You Didn’t Build That! Somebody Else Made That Happen.”

Well, apparently it bears repeating: When I, an entrepreneur or businessman, start a business, it usually takes years of persistent work before there is any return on investment: contrary to what you may have heard from modern-liberal bureaucrats, you cannot succeed in business without really trying. I suppose it's true that such an endeavor wouldn't have succeeded had I not been standing on centuries of mercantile tradition and experience, or for that matter had I not had electricity and running water. But that is only to state the obvious.

What, then, was the president getting at? Besides belittling the aspirations of the business class, what was the subtext of his remarks? That government provides the conditions for a civil society that make entrepreneurship possible? I think we already knew that. Newsflash, Mr. President: to the extent that I contribute to the commonweal, pay taxes, keep abreast of the issues, and vote, I am a member of that government. In other words, the agent or silent partner of my labors, the "somebody else [who] made that happen," was me.

Pericles is always relevant in this regard. In his funeral oration, as presented by Thucydides, he said,

Here each individual in interested not only in his own affairs but in the affairs of the state as well: even those who are mostly occupied with their own business are extremely well-informed on general politics — this is a peculiarity of ours: we do not say that a man who takes no interest in politics is a man who minds his own business; we say that he has no business here at all.

Perhaps this is what Lincoln was also getting at in the final flourish of the Gettysburg Address: "that government of the people, by the people, for the people, shall not perish from the earth."

There has always been some mystery surrounding his use of the words, "of the people." It is obvious that a government by the people is one run by commoners (as opposed to the landed aristocracy), and that a government for the people is one devised for the benefit of everyman (not just a hereditary class of kings or oligarchs), but what exactly did Lincoln mean by a government of the people?

I believe he recognized that insofar as we work, pay taxes, stay informed, and vote, we are not simply passive participants in the democratic process, but constitutive of democratic government itself.

So why do politicians insist on the obsolete dichotomy of government and governed? Is it because the citizenry need leaders to translate their will into effective policies? Or is this an elitist plot to exclude everyman from the esoteric operation of government? If the latter, I have a few words for you prodigies of incumbency occupying the plush seats of government: you didn't build that bridge or that superhighway. Somebody else made that happen.




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OMG! The Free Market Works!

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An unintentionally hilarious piece recently appeared in the Pravda of contemporary progressive liberalism, The New York Times.

This lachrymose report laments the fact that major public school districts around the country are losing customers — oops! students — and the result is layoffs. Of teacher union members, no less! Quelle horreur!

Between 2005 and 2010, Broward County (FL), Chicago, Cleveland, Columbus (OH), Detroit, Los Angeles, Philadelphia, San Bernardino, and Tucson have all lost students, some massively.

The article tells some tragic tales. LA let go of 8,500 teachers in the face of an enrollment drop of 56,000 students. Mesa Unified District lost 7,155 students and had to close four middle schools and lay off librarians — the ultimate evil.

The cutbacks are threatening offerings in art, foreign languages, and music.

But to what do the authors of this mournful article attribute this decline? They mention declining birthrates, unemployed parents moving elsewhere to find work, and illegal immigration crackdowns. But they also mention — tentatively and skeptically — the movement of students from regular district schools (essentially run by the teacher unions) to charter schools (run more or less autonomously, i.e., not under the unions’ thumb).

In Columbus, enrollment in charter schools rose by 9,000 students while enrollment in the public school district dropped by 6,150. One honest parent explained, “The classes were too big, the kids were unruly and didn’t pay attention to the teachers.” So she sent her dyslexic daughter to a nearby charter school, where — GASP! — “one of the teachers stayed after school every Friday to help her.”

In an institution where pleasing the customer is actually important, it’s no surprise that her daughter received the help she needed.

Nationwide, while the number of kids in regular public schools dropped by 5%, the number in charter schools rose by 60%.

Naturally, the public school system special interest groups — greedy unions, self-righteous teachers, callous administrators, and so on — are hysterical. For example, one Jeffrey Mirel, an “education historian” at the University of Michigan, bleated that public schools are in danger of becoming “the schools nobody wants.”

Wrong! Public schools have been for some timethe schools that nobody wants. Before the 1960s, teachers unions either didn't exist or — where they did — didn't exert the control they assumed in the 1970s. Teachers unions run schools for the benefit of their members only. So the problems started accelerating.But what’s happening right now is that some few lucky kids are being given the choice to get out — and they’re taking it.




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Populist Fizzle

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The Obama campaign and the DNC appear increasingly desperate in their attempts to find some attack on Romney that resonates with the American people. They’re desperate, of course, because the economy continues to drift in the doldrums, and the election looms.

The latest is a populist ploy. Key Democratic politicians started attacking Romney for having invested in foreign companies and having assets in Swiss and other offshore accounts. This was immediately trumpeted by the mainstream media. How dare Romney invest abroad! He’s the pioneer of offshoring!

Now, it is by no means illegal — yet — to put some of your portfolio into foreign assets, and it is in all the “Investing 101” books that you ought to do so. You need to diversify your assets to minimize risks, and this may include diversifying outside your home country. Putting money in a Swiss account, for example, is a good hedge against inflation, given the historic stability of the Swiss monetary system. But the Dems are banking on the fact that the average person doesn’t understand all this — and that is a very good bet.

Alas, however, the attack fizzled when it was discovered that Rep. Debbie Wasserman Schultz (D-FL), chair of the DNC, had herself invested abroad, repeatedly. She invested in the Davis Financial Fund, with holdings on the State Bank of India, as well as a Swiss private banking group. She also invested in the Fidelity Advisor Overseas Fund, which has holdings in HSBC (a British bank), Novo Nordisk (a Danish drug company),VW, Rakuten (a Japanese shipping firm) and so on.

It also turns out that another person who has invested abroad is the ever-offensive Rep. Nancy Pelosi (D-Venus), “head” (though not the brains) of the House Democrats. She earned millions from her investment in Matthews International Capital Management, which focuses primarily on Asian equities.

Obama, like his spiritual mentor Nixon, is much given to what psychologists call “projection” — calling others what you yourself are. Obama once accused McCain’s campaign of “throwing stuff up against the refrigerator to see what sticks.” Yes, President Obama, and you don't have an infamous "enemies list."

But it looks like this little piece of magnetized crap isn’t sticking. Try again, guys.




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The New Shape of Immigration

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There has been a veritable blizzard of major news stories lately. Between the continuing crisis of the European Union, the spate of major rulings from the Supreme Court, and the continuing presidential election campaign, we’re all a bit overwhelmed.

But a recent report from the Pew Research Center bears immigration news worth noting and commenting upon.

The report, aptly called “The Rise of Asian Americans,” is a hefty tome indeed, at 215 pages chock full of data. It reveals that for the first time in history, the plurality of all new American immigrants now hails from Asia — primarily China (23.2% of all Asian Americans), India (18.4%), Japan (7.5%), Korea (9.9%), the Philippines (19.7%), and Vietnam (10.0%).

As recently as 2007, the plurality of immigrants was Hispanic, primarily from Mexico. That year, 540,000 immigrants were Hispanic, compared to 390,000 Asians. But in 2010, Asians were 36% of new immigrants, while Hispanics dropped to 31%.

This culminates the decade-long, precipitous slide in Hispanic immigration, which was at 1.2 million in 2000, fell to about half that in 2002, went up to about 800,000 in 2005, and has dropped steadily since, to less than 400,000 in 2010.

By contrast, the number of Asian Americans quadrupled between 1980 and 2010, and now stands at 18.2 million, counting native- and foreign-born, adults and children. (The Pew Center’s count is slightly higher than the Census Bureau’s, with the difference being that Pew counts people with only one Asian parent as Asian. That is nearly 6% of the population, quite a rise from the 1% it was back in 1965. (By comparison, non-Hispanic whites are 63.3%, Hispanics are 16.7% and blacks 12.3%). The report projects that by mid-century, the number of Asian Americans will hit 41 million.

Of course, this is just a projection by the Pew Center, which is certainly reputable, but obviously fallible. Still, these figures are suggestive.

The reasons for this shift are varied. There are relevant demographic shifts abroad, such as the drop in the birth rate in Mexico, which as recently as the 1960s was one of the highest on the planet, with the average woman having nearly seven children — higher even than Indian and Chinese women — but now is roughly the same as the US rate (a little over two children per average woman).

But the report mentions what is clearly the major factor: our nation’s continuing shift from a manufacturing to an epistemic or knowledge-based economy. Blue-collar jobs, especially the low-skilled ones, simply have been increasingly less in demand over the past quarter-century. And a prolonged recession and slow recovery such as the one we are enduring only increases the gap in employment levels between blue- and white-collar workers.

So the disappearance of a lot of blue-collar jobs, especially in construction, has meant that more opportunities have opened for Asian immigrants, who tend to have higher educational attainment than recent Hispanic immigrants.

Add to this another factor: we have tightened the southern border, which means that Asians, who tend to get more student and high-tech (H1-B) work visas, are now in a better position to come here.

A major factor in their success is the fact that Asian Americans have a lower rate of single-parent households than does the population as a whole (20% versus 37%). They are more likely to be married than is average for Americans (59% versus 51%), and have fewer births to single mothers (16% versus 41%).

However, of paramount importance is the level of higher education. Nearly half (49%) of all Asian American workers have a bachelor’s degree, which is more than half again as many as the average — 28% — for all American workers. For non-Hispanic whites, it is 31%, for blacks 18%, and for Hispanics 13%.

Asian students — both American-born and foreign — tend disproportionately to choose more technical college majors, which is no doubt another factor in their success. In 2010, they received 45% of all engineering doctorates awarded at American universities, 38% of all computer and math doctorates, 33% of all physical sciences doctorates, 25% of all life sciences doctorates, and 19% of all social science doctorates.

Since Asians are culturally very inclined to pursue higher education, and since the US has an extensive but still relatively inexpensive source of higher education, and again since our economy is increasingly knowledge-based, it is no surprise that as a group Asian-Americans are moving sharply upward economically.

That rise has been as dramatic as it has been rapid. Asian Americans now have the highest median household income of any broad American ethnic group — European Americans included. Asian-American households average $66,000 a year, nearly a third higher than the median of all American households (which is $49,800). Whites average $54,000, Hispanics $40,000, and blacks $33,300.

Among Asian Americans, median annual family income varies. Indians average $88,000, Filipinos $75,000, Japanese $65,390, Chinese $65,050, Vietnamese $53,400, and Koreans $50,000. But all this is quite remarkable, considering that according to Pew’s figures, nearly three-fourths (74%) of Asian American adults were born abroad.




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It’s a Gas

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The massive growth in the production of natural gas, the result of using unconventional sources and methods (mainly the fracking of shale deposits) continues to demonstrate how free markets can transform the world, even in the face of statist oppression.

Two recent Wall Street Journal pieces illustrate this anew. The first reports that another industry is now converting its vehicles from diesel to natural gas — an industry you might not think of offhand. Ferryboat fleets, both here and in Canada, are making the switch because of the continuing (shale-)rock-bottom prices of natural gas.

From Staten Island to Washington State and British Columbia, ferry fleets are following the lead of Norway, which a decade ago started fueling ferries with liquefied natural gas (LNG).

One attraction of natural gas is, again, its pricing. Natural gas at the Henry Hub distribution center (a standard benchmark for natural gas pricing) hit a low of $1.95 per million BTUs this year, the lowest price in 13 years. This, while diesel skyrocketed by 140% from 2004 to 2011.

A second attraction is that, if spilled, LNG doesn’t form a toxic slick that requires costly cleanup, even as it should be so unfortunate as to kill off wildlife, or tourists, or both.

Third, LNG is actually less likely to be unfortunate, because it is less inflammable than diesel.

Of course, the switch will take time and upfront investment — as for instance, to build plants to chill and compress the gas, and new holding tanks for the ships. But the cost savings make the decision obvious, even if the timing isn’t.

The second WSJ piece is of more — shall I say — global importance. It reports that more and more US utility plants are switching from dirty coal to clean natural gas, not because of EPA coercion, but because of the coercion of free-market pricing.

Coal consumption by American power companies dropped by 18.8% in the fourth quarter of last year, compared to the previous quarter, and 9.4% compared to the fourth quarter of the year before. Again, the switch was driven by the drop in natural gas prices.

Peabody Energy, one of the biggest coal producers in the world, now estimates that American coal demand will drop by 10% this year, or 100 million tons.

The free market is helping to reduce air pollution. Obama, are you paying attention?




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Neo-Socialism: The Results Are In

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Despite his campaign promise to govern as a moderate, President Obama has aggressively pursued what can only be described as neosocialist economics. This is a system of governance within which the government essentially runs business, but not in its own name — so that when failures occur, it can disown responsibility and blame business instead. It is a new and “improved” socialism, so to say.

The program has included outright government takeovers of most of the auto industry and the student loan industry, massive new control of the financial industry, near total control of the health industry, near total dominance of the energy industry, stimulus spending bills (often favoring campaign donors), housing bailouts, cash for clunkers, cash for weatherproofing, and so on. All of this is Obama’s doing. So is the $5 trillion he has added to the national debt — pushing us past France in debt as a percentage of GDP.

The result has been a long, lingering malaise — the Obamalaise — posing as a “recovery.”

The latest jobs report starkly illustrates the failure of Obamanomics. It shows that last month the economy — in the third year of an economic recovery — created a ludicrous 80,000 jobs. Considering that the economy needs to create about 125,000 new jobs each month just to keep up with population growth, this was a profoundly pathetic report card. The unemployment rate stayed at 8.2%, only because — again — more people dropped out of the work force.

Worse, of the 80,000 jobs created, 25,000 of them — nearly a third — were temp jobs.

Even worse, in June, while a net 80,000 jobs were created, 85,000 people went on federal disability! Yes, more people got on the SSDI disability rolls than got productive jobs. Indeed, since June 2009, while Obamanomics has created 2.6 million jobs, it has put nearly 3.1 million new people on SSDI disability. Moreover, a whopping 275,000 additional people have applied for disability. Obama is truly the Disability King.

Add to this the fact that yet more people went on food stamps, cementing Obama’s rightful title as the Food Stamp King. In fact, from June 2009 to April of this year, the number of food stamp recipients exploded upwards by 11.3 million, or nearly a third.

Amazingly, while Obama has his highest support among blacks, followed by Hispanics, and his lowest support among whites, it turns out that white unemployment stands at 7.4%, Hispanic unemployment at 11%, and black unemployment at a gut-wrenching 14.4%.

The general unemployment rate has now been over 8% for 41 months in a row, which sets another new record — one that beats all previous administrations over the last six decades. And the length of time the average person has been unemployed under Obama’s “recovery” has been 20.6 weeks, completely eclipsing the earlier record of 10.5 weeks.

If the labor force participation rate were now what it was when this neosocialist administration took power, the unemployment rate would be 10.9%. It is only as “low” as it is because many people have stopped “participating” (i.e., looking for jobs).

Three years of Obamanomics recovery has created job growth of 75,000 a month on average, or 2.6 million in total. By contrast, Reaganomics (neoliberalism) over the same length of time averaged 273,000 a month, or 9.8 million in total.

Of course, the nation was smaller then. If we correct for population size, the Reagan neoliberal recovery produced the equivalent of 360,000 jobs a month over the same period, or a total of 13 million.

The “recovery” brought by Obamanomics created a total expansion of real GDP of only 6.7% over eleven months. Again, by comparison, Reaganomics brought a total expansion of real GDP of 17.6% in the same period — or well over two and a half times as great a growth rate.

So what shall we call the president: The Disability King? The Food Stamp King? The Long Term Unemployment King? The Slow Growth King?

Perhaps “the clown-prince of neosocialism” will do.




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Up in Smoke

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With the recent release of yet another dismal jobs report, commentators in the MSM have begun to ask, “Why aren’t jobs being created?” They should have been asking themselves this question for the last 40 months, but, hey, better late than never.

Yet the possibility that the explosive growth in regulation might play a role in deterring job growth is not something they spend much time discussing.

It should be.

A recent story gives us a fresh illustration of the role that regulation plays in destroying jobs. (By “regulation,” I mean all increases in statutory law, rulings by regulatory agencies, and expansions of common law aimed at controlling business activity.) It concerns a business that I, a nonsmoker, never heard of, one that has never been destroyed by regulation.

It turns out that in the face of huge taxes on cigarettes produced by the major tobacco companies, many cigarette smokers started frequenting small stores that owned “roll-your-own” (RYO) cigarette machines. The RYO machines allowed customers to buy loose tobacco, especially pipe tobacco (taxed at a far lower rate than manufactured cigarettes) and paper tubes in the shop, and use the RYO machine to churn out a carton of cigarettes in just a few minutes.

For a devoted smoker, the attraction of RYO shops is clear. They save about half the price of regular cigarettes. And they allow smokers to blend different and more flavorful tobaccos together, and use both tobacco and paper that are free from many of the chemical additives.

But naturally, the attractiveness of the shops angered two powerful groups. First, it pissed off puritan “progressives” who just cannot stand people smoking, and are always conducting an anti-smoking jihad. Not content with insane taxes on people who choose to consume a lawful product, they want to stop it altogether.

Second, it pissed off the major cigarette makers — aka Big Tobacco — who hate seeing customers choosing to buy cheaper in little shops around the country.

So in a classic case of rentseeking (businesses manipulating the regulatory system to hurt their competition, rather than producing a better or cheaper product) Big Tobacco found a politician — the truly execrable Sen. Max Baucus (D-MT) — to insert a small amendment to a massive transportation bill that redefines RYO shops so that they fall under the same category as Big Tobacco cigarette manufacturers, thus imposing a massive tax increase on them — one that is intended to destroy them, and probably will.

Baucus of course was happy to do this for the campaign cash Altria and other Big Tobacco companies shoveled at him. And those Big Tobacco companies are happy to stomp out of existence a group of little competitors. And Obama — who never met a regulation he didn’t like — was happy to sign the bill.

But the small businesses that bought the RYO machines have been screwed. Over a thousand of these machines (they cost over $36,000 each) were purchased, but are now virtually useless.

So, for example, Robert Weissen and his partners, who own a chain of six RYO shops in Las Vegas (cheekily named “Sin City Cigarette Factory”), says he will have to shut down the machines and lay off 40 people.

There are eight million regulations in our “progressive” (i.e., neosocialist) economy. This has been the story of just one of them.




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Eight Million Regulations

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There is a classic film noir called The Naked City (1948). The film’s plot is the investigation of a murder, and the story takes place in New York City. At the end of the flick, a narrator intones a famous line: “There are eight million stories in the naked city. This has been one of them.”

Reading a recent report on the latest regulations laid down by the Justice Department for compliance with the Americans with Disabilities Act, I thought of a new take on that line: “There are eight million regulations in the Obama state. This is just another flock of them.”

In an effort to ensure perfect “fairness” for all the “disabled,” the feds now dictate the following.

  • Amusement parks must provide at least one seat for the wheelchair-bound on any new or altered ride.
  • Miniature golf courses must make at least half of the holes “accessible,” defined as having a surrounding ground space that is “48 inches minimum by 60 inches minimum with slopes not steeper than 1:48 at the start of play.”
  • Regular golf courses must now have “an accessible route to connect all accessible elements within the boundary,” and must also “connect golf cart rental areas, bag drop areas, teeing grounds, putting greens, and weather shelters.”
  • Gyms must now position at least one of each type of exercise machine so that it is accessible to the wheelchair-bound.
  • Saunas must now provide accessible turning spaces and an accessible bench.
  • Shooting ranges must now provide accessible turning spaces “for each different type of firing position.”

My favorite is this one: all public accommodations must allow miniature horses as guide animals, because some handicapped people have moral or religious problems with dogs.

The good news is that the feds rule out full-size horses. Why, I don’t know — couldn’t some handicapped people have moral or religious problems with both dogs and miniature horses?

The miniature horse rule brings to mind another line I remember from the past: Frank Zappa’s song about Montana — “Just me and the pygmy pony, over the dental floss bush.”




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The Metaphor to Nowhere

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Recently I was invited to attend a national educational conference for college teachers and administrators. I was also invited to send a proposal for a presentation at the conference. I was slightly doubtful about the value of the conference when my proposal was accepted without any vetting — I wasn’t asked to supply my credentials, my background, my experience in the field, or the literature (if any) that I would be using for my presentation. As a matter of fact, I have no specific training in the subject. I have been working in an administrative position for less than a year, and it is not in the field for which I earned my degrees. In short, although I’m a pretty good speaker and I think I have gained some valuable insights from my experiences this year, I have absolutely no qualifications to make a presentation.

I was even more troubled when the conference schedule was sent to me. It offers ten sessions per hour for three days. Just for kicks, I asked the conference coordinator how many people are expected to attend. “Between 200 and 300,” she responded. You do the math: just about every attendee is a presenter! Who knows whether any of them have anything valuable or cogent to say to me? How should I choose which of the ten sessions per hour to attend?

Titles might be helpful, right? So here are some of the offerings during the first couple of hours:

A Self Sustaining Village. A Village of Volunteers. Bringing Online Students into the Village. It Takes a Village to Raise a Budget. It Takes a Village to S-T-R-E-T-C-H a Budget. Developing a Drop In Village. Let the Editorial Village Help you Decide. It Takes a Village: REACH . . . Building a Village to Market Learning Services. Our Students are a Village. And here’s a little twist: Build it and They Will Come. Stream it and They Will Come.

Sheesh!

These faceless “colleagues “of mine seem not to have a creative thought in their brains. This tired old metaphor they’ve trotted out harks back to the wife of a president from three administrations ago! It’s nearly 20 years old! And these folks are supposed to direct me into the future of education?

Sigh. What a waste of time and travel money. I’ll bet most of it is funded by Title V grants. Don’t even get me started on that.

I sent my regrets.




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Vast New Possibilities for Government Control of Our Lives

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Now that we know that the key for politicians to make unconstitutional demands on us is simply to levy a tax on those of us who are recalcitrant, vast new possibilities open up for people who are certain they know better than we do how to run our lives.

For instance, Michelle Obama can begin promoting a Healthy Eating Act, whereby we will all be forced to buy a requisite amount of veggies each week, including my unfavorite, broccoli. I suppose if the fine, er, tax, is not too onerous, I will find that paying the tax is still preferable to filling my garbage bin with things I can't tolerate.

And while the liberals among us are wetting their pants in anticipation of getting to impose those and similar rules, I will be proposing the Affordable Police Protection Act to my representative and senators. It will require every head of household to buy a personal defense handgun and maintain it in an easily accessible place in the home, thus warding off various criminals and reducing the costs of police forces and criminal courts. Or maybe it could be made even stronger and require every adult citizen to carry a handgun at all times, thus reducing crime even more.

Either way, people who absolutely refuse to do their part in the anti-crime and cost-of-policing-reduction effort will be required to pay a tax to offset the costs of dealing with criminal types who continue to operate, hoping to take their own chances with such scofflaws. Of course, the police can spend some time checking random citizens to verify that they are carrying their weapons and weapons permits at all times. Oh, I suppose that proof of purchase might be filed with our 1040s each year, but still there would have to be some way to verify continued ownership. Which should take precedence, though, the Fourth Amendment or the power of Congress to tax?




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