A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION 1

obody is guiltless. Everyone from Presidents to residents: from moneymakers to money changers.

Ignorance and neglect are indefensible explanations.The federal government has lifted the lawful debt

ceiling by $1.5 trillion since July. All of it in the name of bailing out a financial system of its own making—demanding that banks make unsound loans, encouraging people who couldn’t afford to make payments on those loans to accept them anyway, and leaving them with no way out when balloon payments come due.

Then, the housing bubble that so many of us predicted came to pass. The bubble burst. For many Americans, so did the goal of home ownership and starting a small business.

And we taxpayers are left holding the bag and paying the bills.

All of it was avoidable. But while we work our way out of this financial mess, many, if not all of us, will have to adjust our lifestyles to the new realities, learn from mistakes of the past, and teach our children and grandchildren how to avoid financial calamities like this in the future.

I think there are at least four root causes for our current predicament.

First, Government Sponsored Enterprises (GSE’s): Here I am talking about Fannie Mae and Freddie Mac.

Freddie and Fannie purchase mortgages from mortgage companies and banks with the goal of selling some on the private market. Fannie and Freddie own $5.5 trillion in mortgages. As taxpayers, we are on the hook for making good on those mortgages.

Most financial organizations are required to have 10 percent in their cash reserves to cover mortgage exposure. That is because during any 50 year period—regardless of economic conditions—no more than 10 percent of mortgages would be at risk of default statistically speaking. The federal government

NON-PROFIT ORG.U.S. POSTAGE

PAIDOLYMPIA, WAPERMIT #462

A lighthouse for the wei ji 3 not perfection, just progress 8

LIVING LIBERTYNOVEMBER 2008 | WWW.EFFWA.ORG A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION

buddy, cAn you spAre A new ferry 6

Continued on page 2

N wanted banks and others to have enough liquidity to cover those defaults.

However, the rules changed for Freddie and Fannie during the Clinton administration. Their cash reserve requirements were reduced to 2.5 percent of mortgages purchased. When the housing crisis hit, neither had

enough in cash reserves to cover their losses. The house of cards started to fall. And yet, at the direction of the federal government, both institutions continue to absorb new loans, many of them untenable!

What is going on here?Politics, of course, not financial prudence. According

to Peter Wallison, the former Treasury General Counsel, “Among other things, Fannie and Freddie orchestrated substantial campaign contributions to the campaign funds of their congressional supporters”

They hired former Congressional staffers as lobbyists and engaged lobbying firms that had strong relationships

with members of Congress, including people tied to both presidential candidates.

It’s not just about campaign donations or hiring congressional staffers as lobbyists. It is about a politically correct definition of “social justice” that got its start during the Carter administration in the 1970s.

The Community Reinvestment Act was passed in 1977 under Carter and gave regulators the power for the federal government to “encourage” banks to issue high risk loans that would be sold to Fannie and Freddie with federal guarantees. The circling of the mortgage waters around the drain began.

The program escalated in the late 1990s under Congressional pressure, leading to no-money-down mortgages, with no proof of income and no verifiable address! As long as home prices continued to increase,

by Bob Williams

It Is tIme to address the root causes of our fInancIal crIsIs

so, how dId we get here?So how can we get out of thiS Situation... without becoming france?

Pg. 10

2 LIVING LIBERTY

34

6789

101112

“Quote”

Evergreen Freedom Foundation PO Box 552

Olympia, WA 98507(360) 956-3482

Fax (360) 352-1874 info@effwa.org • www.effwa.org

VOLUME 18, Issue 11

EFF’s mission is to advance

individual liberty, free enterprise and

limited, accountable government.

this issue

3 LETTER FROM LYNN A LIGHTHOUSE FOR THE WEI JI

4 READING THE FEDERALIST PART x THE ExECUTIVE 6 WELCOME DIANA CIESLAK BUDDY, CAN YOU SPARE A NEW FERRY?

7 CAN MEMBERS ROLL OUT FERRY TALES IN DOWNTOWN SEATTLE A NOTE ABOUT OUR CAN MEMBERS

8 NOT PERFECTION, JUST PROGRESS DIARY OF A FREEDOM LOVING MOM 9 EFF SUES SECRETARY OF STATE FOR ALLOWING UNDERAGE VOTER REGISTRATION ELECTION SECURITY LEGISLATION ELECTION SECURITY IN WASHINGTON BY THE NUMBERS 10 SO HOW CAN WE GET OUT OF THIS SITUATION... WITHOUT BECOMING FRANCE?

11 EARLY CHRISTMAS GIFT IDEAS

12 VETERAN’S DAY TAx LAW CHANGES REINSTATE IRA ROLLOVER PROVISIONS

Publisher:Tom Henry

Editor:Tom Henry

Layout:Joel Sorrell

November 2008

“All tyranny needs to gain a

foothold is for people of good

conscience to remain silent.”

– Thomas Jefferson

w w w . l I B e r t Y l I V e . o r g

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OUR BLOG!PoSt Your oPinion on the iSSueS!

the scheme worked. But when home prices started to fall, the game was up.

President Bush talked about this in his State of the Union address in January 2003, but nobody paid attention. Banks were held in detention by the federal government, limiting growth opportunities, unless they agreed to open their bank vaults to financially risky loans. Reform legislation offered to Congress failed to pass.

Then there was the easy money from the Federal Reserve. On January 2, 2001, the federal funds rate was six percent. By June 2005, the rate was down to one percent. The rate fell gradually over the years, but it rearranged what kind of debt loads people and businesses could afford.

Borrowing was easier and loans became cheaper. Mortgage rates went down.

Somebody who could afford to make a monthly mortgage payment of $2,000 per month in May 2000 would have been able to afford a home worth $282,000. After June 2003, that person would have been able to afford a home worth $460,000.

Unfortunately, many of those mortgages came with balloon payments—adjustable rate mortgages that homebuyers couldn’t afford, rather than more traditional 30-year mortgages. In other words, people who had low monthly payments when they first bought their homes were faced with stiff increases in monthly payments at some point in the future. That future arrived, and people couldn’t afford the new payments.

People buying the homes—and the lenders who gave them the money—were gambling that home values would increase and, if you couldn’t afford to make your payments, you’d be able to sell the home to some other person at an enormous profit.

That worked for a while, but the bubble burst.

Aggravating the situation were new accounting rules, such as “mark to market” that was put in place following the Enron scandal. The rule forces companies to value their assets at existing market prices which, in dizzying financial times, furthered the downward spiral.

But the bottom line is that we have a fiscal crisis that was facilitated by the federal government, and which most Americans participated in heartily. After all, we elect many of these people. The rest are appointed by the people we elect. We need to do better.

Root Causes Continued from page 1 “ unfortunately, many of thoSe mort-

gageS came with balloon PaymentS—

adjustaBle rate mortgages that home-

BuYers couldn’t afford...”

A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION 3

Letter from LynnLETTER FROM LY NNby Lynn Harsh

ei ji. It means “precarious moment” in Chinese. Some people tack “opportu-

nity” to the definition as well, though I can’t vouch for that connection.

Nonetheless, can’t you remember a time when a crisis turned out to be an opportunity?

We are in an opportunity-rich environment right now, especially here at EFF. More people than ever are asking questions, scratching their heads, and hoping we have an answer or two. Our human need to look for trusted authority has been frustrated, because most people no longer believe elected officials or the titans of busi-ness.

For a growing number of people, EFF seems to be safe place to get information and ideas. In these tumultuous waters and during these precarious moments, it’s good for us to be a lighthouse.

I want to be sensitive about this. Perhaps you are staring at your retirement or savings accounts in disbelief, earnestly trying to find opportunity buried under the debris. I understand. Occasionally I have mut-tered that it was easier to make decisions when I was really poor, and like some of you, I may have the chance to try that option again.

Still, we mustn’t ignore this reality: Opportunity goes unrealized by most people, especially during tumultuous times. Why?

We tend to look at the tumult only. While we need to be aware and vigilant in its midst to survive, oppor-tunity goes to those who also see the shore, and who can help as many people as possible count the cost and exercise the self-discipline necessary to get there.

So here we are in economic and governing chaos. They go hand-in-hand, by the way. We don’t self-gov-ern, and we make bad choices about who we elect to take care of our state and country. Our elected officials vote for policies that create economic chaos on a big scale. We make decisions that create economic chaos in our own lives.

It blends together to make a big, scary mess. We citi-zens throw up our hands and demand that elected offi-cials fix the problems. Most of them, looking no further than a few years down the road, start applying remedies that are akin to bleeding the patient to death.

But in America, our form of government dictates that the solutions start with us, not our elected officials.

Yikes! Now what?Well, we already know that people feel everything is

out of control and they are looking for leadership. We know our natures will push us toward a safe place to land, no matter where that is.

So why not make sure EFF is one of those places? We cannot satisfy the deepest needs of the human soul, to be sure, but we can help people understand basic policies and

our role as citizens. We can describe the shore and point them to it. We can help identify and neutralize the obstacles between here and there.

This letter is not meant to convey unbridled optimism. These next years are going to be rough because we live in a country where cit-izens are mostly undereducated about these matters and are used to quick government-

sponsored gratification. We have elected a whole slew of people who haven’t a

clue about how money and freedom are created and

destroyed. What I want to convey is rational determina-

tion. The degree of difficulty is no indi-cator of whether or

not these impor-tant matters should

be addressed. The degree of difficulty

informs us of how best to get it done.

These are the times when our work gets magnified, and our staff knows it.

We regularly assess the turbulent sea to ensure survival. But we also have an eye on the other shore

and are working toward eliminating the obstacles in between us and it.

Thank you for investing in this work. For many of you, it is a true sacrifice.

The most expensive financial planner you’ll ever have…is your member of Congress.

I guess it’s just not challenging enough to deal with Putin, Chavez or Nancy Pelosi. Working out trade deals and tracking down terrorists…so boooring!

So, about two-thirds of the members of Congress have decided they should plan our financial futures right down to how many deadbeat mortgages we should pay for and defunct insurance companies we should own.

These folks do have lots of financial experience. I mean, you have to admire people who can tack an excise tax on the sales of wooden children’s arrows that exceeds the actual cost of making the arrows. If that’s not genius, it’s at least chutzpah. They have created thousands of these taxes, and once in a while, they tem-porarily suspend some so particular members will con-sider voting for important things like the bailout bill.

In 2000, they passed the Commodity Futures Mod-ernization Act. Tucked in those pages was the repeal of the Glass-Steagall Act—the firewall between commer-cial and investment banking. That meant complicated derivatives would not have any regulation.

Now, I’m not a big fan of a lot of regulation, but it would have been good to provide more transparency. Did you know, for example, that you owned financial instruments that were mortgage-backed securities sup-ported by credit default swaps leveraged many times more than their possible value? Even a dictionary doesn’t help untangle that gaggle of words.

Then there are the GSEs: Government Sponsored Enterprises, like Freddie and Fannie. These institutions were created by Congress to help people get loans, espe-cially those who might otherwise not be able to afford a mortgage. Did your long-range financial plan include helping people who are not members of your family pay off their mortgages or save their securities?

And of course Congress passed the infamous Commu-nity Reinvestment Act that forced loaning institutions to issue mortgages to people who often couldn’t pay for them. The mortgages got bundled into securities, were given AAA ratings, and got purchased by companies like AIG and Lehman Brothers.

Unfortunately, the lack of derivative transparency, the creation of Freddie and Fannie and the Community Reinvestment Act turned out to be really bad deals. So, why didn’t Congress tackle them when they decided to address the serious financial crisis their policies helped create?

Why did they decide to use our money to buy overval-ued and sometimes worthless assets in hopes they might be purchasable someday at a higher price?

Hugo Chavez may have beat us to 21st century social-ism, but we did it bigger.

I’d consider “rehiring’ a member of Congress who decided that minding your business and finances is prin-cipally your job. I’d consider retiring the rest.

A lighthouse for the wei ji

W

What is the differ-ence between an investment banker and a pigeon?

A pigeon can still make a deposit on a BMW.

Might as well laugh

Q:

A:

(I don’t know who thunk this up or I’d give him or her credit.)

4 LIVING LIBERTY

Part X:

The FederalistReading

Reading The Federalist in 2008The Federalist Papers explain both the reasons for and the workings of the Constitution of the United States. It is “the most powerful body of political thought ever produced in America,” according to historian Rober t Middlekauff. For Americans who believe in the enduring value of the Constitution, The Federalist is an essential resource and a guide.

This essay is the tenth in a series to help readers understand and appreciate the lasting relevance of this American classic. Living Liber ty presents these monthly essays and encourages you to read The Federalist with us.

by Trent England

T

The execuTive

he American founding combined the powers of principle and pragma-

tism to forge a lasting nation. The Found-ers were neither philosophical dreamers nor hard-boiled Machiavellians. They believed in liberty and in the lessons of history; they found both a yearning for freedom and a lust for power written on the heart of man. Writing in 1787 and 1788 to defend the proposed Constitution, the authors of The Federalist rest their reasoning on just this dual foundation.

The work was instigated by Alexan-der Hamilton, who convinced James Madison and John Jay to join the effort. Supporters of a stronger national govern-ment were known as “Federalists” even before the Convention in Philadelphia. His use of the title “The Federalist” made clear from the beginning that Hamilton intended the work to be the definitive defense of the Constitution.

Hamilton also selected the pen name, “Publius,” which Hamilton, Madison, and Jay would all use. Anti-Federalist essays had already appeared under a variety of pseudonyms, including “Inspector” (who wrote some initial vitriolic attacks against Hamilton), “Centinel,” “Federal Farmer,” “Brutus,” and “Cato” (thought by some to have been New York Gover-nor Clinton).

The use of pseudonyms was common among Eighteenth Century political writ-ers. Masking the author’s identity forced readers to contend with the substance of a written work rather than dismissing it based on its byline. In Publius’ case, it also served to represent a collaborative work as that of a single and thus very prolific author. The selection of a particu-lar pseudonym, however, gave a writer another tool, an additional method of contextualizing his arguments.

Plutarch’s Lives, a collection of bio-graphical essays about Greek and Roman leaders written in the early Second Cen-tury A.D., was familiar to educated read-ers in the Eighteenth Century and thus a common source of pseudonyms. Hamil-ton had written in 1784 under the name Phocion, who Plutarch said “came to the helm when the ship of the state was just upon sinking.” The Anti-Federalist use of “Brutus” and “Cato,” both also chronicled by Plutarch, recalled the last defenders of the flagging Roman Republic. Hamilton directly challenged this implication by selecting Publius, another subject of Plu-tarch’s Lives, as The Federalist’s nom de plume.

Publius Valerius was a founder of the Roman Republic. After overthrowing a king who had become “the instrument

of insolence and tyranny,” the Roman people divided executive power between two consuls. Publius’ fidelity to the peo-ple’s liberty—to the meaning of their revolution—brought him to hold one of these offices. When his co-consul died in battle, Publius became the first person in the young republic to hold executive power alone.

Plutarch notes that although Publius was at first accused of assuming monar-chical and tyrannical powers, the oppo-site was in fact true. Publius cut taxes on the poor and so “encouraged their labors,” allowed “offenders the liberty of appealing to the people,” and permit-ted lawsuits against the consulship. He apparently went so far as to tear town his own house when people complained that it was too “stately and royal.” Plutarch keenly notes that as Publius “detracted from his authority he added to his real power.” That is, by respecting the liberty of the Roman people he increased his own authority as consul.

By analogizing support for the Consti-tution to the story of Publius, Hamilton expresses his belief that the American republic is at a beginning, rather than an end. Plutarch’s account of Publius showed that government power could serve the people’s liberty. Furthermore, protecting and even increasing liberty might serve the self-interest of leaders in a well-crafted republic, where power and responsibility go hand-in-hand. In The Federalist, Hamilton’s triumvirate writes as Publius to explain why the new Con-stitution will protect and increase liberty in the American republic.

Like many former officers of the Con-tinental Army, Hamilton had a particular respect for the importance of executive power. He believed that “government should be so constructed as to give it all the energy and the stability reconcilable with” republican principles. To accom-plish this, it was necessary to create a strong executive power held by a single person. This was a radical change from the Articles of Confederation, which cre-ated neither an executive nor a judiciary. Many Anti-Federalist writers claimed the

new executive office would intentionally or simply inevitably lurch toward monar-chy.

Federalist No. 67: The Executive Department (Hamilton)Publius begins his eleven essays on the presidency with a rhetorical strike at the veracity of the Constitution’s critics. Prominent Anti-Federalist writer Cato, in his fifth essay, mistakenly attacked the Constitution for granting “the execu-tive the unprecedented power of making temporary senators, in case of vacancies, by resignation or otherwise.” In truth, the Constitution gives that power to state executives—governors (including New York Governor Clinton, who may have been Cato and was a prominent Anti-Federalist). Publius exploits this inaccu-racy to cast doubt on all of the attacks leveled against the proposed presidency.

Federalist No. 68: Electing the Presi-dent (Hamilton)Publius moves from his broad assault on the Anti-Federalists to “almost the only part of the system, of any con-sequence, which has escaped without severe censure.” The system of choos-ing presidents—the Electoral College—was acceptable to most Anti-Federal-ists because it recognized the individual states as political societies.

The process begins, Publius points out, with the people. He seems to anticipate that the people will themselves elect the Electors, though this is not required by the Constitution and did not become the common practice until the 1820s. According to the Constitution, Electors will be chosen either by the people’s state legislators or according to some method devised by them.

Because the Electors may not hold any federal office, Publius contends that they will be appropriately independent from the incumbent President. Because the Electors will meet only with other del-egates from their state and not long after their election, the opportunity for cor-ruption is diminished. The whole system will “afford as little opportunity as pos-

A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION 5

february | federalist no. 1: introduction

march | federalist nos. 2–8: importance of a union of all the states

april | federalist nos. 9–14: the size of the union and its economic conditions

may | federalist nos. 15–22: Defects of the articles of confederation government

june | federalist nos. 23–36: necessity of “energetic” government

july | federalist nos. 37–40: the constitutional convention and its detractors

august | federalist nos. 41–51: controlling government power

september | federalist nos. 52–61: the house of representatives

october | federalist nos. 62–66: the Senate

november | federalist nos. 67–77: the executive

december | federalist nos. 78–83: the Judiciary

january 2009 | federalist nos. 84–85: the lack of a bill of rights and the conclusion

During 2008, Living Liberty will present monthly essays and encourages you to read the federalist with us.

“ The mosT powerful body of poliTical ThoughT ever produced iN america.”

– roberT middlekauff

We are pleased to announcce that the Reading The FederalisT essays will be available in book form on completion of the series.

Presidential Powers CheCks established by the Constitution

Commander-in-Chief Only Congress may raise, regulate, and pay for military forces and declare war

Pardons and reprieves Does not extend to impeachments

Force legislature to adjourn Only if House and Senate fail to agree on adjournment

Treaties and alliances Requires consent of two-thirds of the Senate

Receive ambassadors Not limited, but is only a matter of “convenience”

Appoint ambassadors, judges and other officers

Requires the “advice and consent of the Senate”

sible to tumult and disorder.” The select body of Electors will be better suited than the people at large to make a wise and informed selection.

Federalist Nos. 69–70: The Real Char-acter of the Executive (Hamilton)The rest of Publius’ essays on the Exec-utive address more controversial topics. Federalist No. 69 responds to the allega-tion that the presidency will tend toward monarchy. Publius offers a litany of con-trasts between the Constitution’s execu-tive and the King of Great Britain. A recurring theme is that the presidency bears a greater resemblance to the gov-ernorship of New York than to any model of monarchy. While the president might superficially resemble a king, each being “a single magistrate,” Publius points out that the same thing is true of the Sultan of the Ottoman Empire and the New York governor.

Very different from a hereditary mon-arch who birth selects and who serves for life, the president must win election and will serve a fixed, four-year term. The original Constitution placed no limit on re-election. Publius further points out that “the person of the King of Great Brit-ain is sacred and inviolate. The American Executive will be subject to impeachment by the House of Representatives and, if convicted by the Senate, to removal from office and criminal prosecution. While the King has an absolute veto against Parliament’s legislation, the President’s veto can be overturned by two-thirds of both houses of Congress.

Here Publius considers a list of the executive powers. He points out the Con-stitution’s many checks on presidential authority, limits not present in the British system. The chart below follows the list of powers and checks recorded in Feder-alist No. 69.

Publius concludes the essay noting several powers of the British King that form no part of the presidential power. The King can bestow titles of nobility and establish corporations, and has the power to regulate commerce, currency, and weights and measures. The King, exclaims Publius, is even “the supreme head and governor of the national church!”

Publius addresses his 70th essay to the argument “that a vigorous executive is inconsistent with the genius of republican government.” The opposite is true, he writes.

Energy in the executive is a leading character in the definition of good government. It is essential

to the protection of the community against foreign attacks; … to the steady administration of the laws; to the protection of property …; to the security of liberty….

A feeble executive implies a feeble execution of the government [which is] but another phrase for a bad execution; and a government ill executed, whatever it may be in theory, must be, in practice, a bad government.

The required “ingredients which constitute energy in the executive” provide the outline for the balance of Publius’ essays on the Executive branch. These are “unity; duration; an adequate provision for support; and competent powers.” The remainder of No. 70 defends “unity,” that is, placing executive power firmly in the hands of a single person.

If there were multiple executives or if a single executive was made reliant on some kind of council, the inevitable differences of opinion would weaken the authority of the office and its responsibility to the people. It is the function of the legislature to represent diverse interests and to deliberate. When it has decided and legislated, the time for deliberation is past and execution ought to be efficient and effective. The people should have no doubt what individual is ultimately responsible for the execution of their law.

Federalist Nos. 71–72: Duration in Of-fice of the Executive (Hamilton)Against those who consider four years too long a term for the executive, Pub-lius writes that sufficient duration in of-fice is essential “to the personal firmness of the executive magistrate” and “to the stability of the system of administra-tion.” A person will take care of property that he believes will long be in his pos-

session, but is likely to misuse, abuse, or simply ignore property if he knows it will be quickly taken away. So, too, with the powers and responsibilities of the presi-dency; a shorter term might not suffi-ciently attach “the interests of the man … with the constitutional rights of the place” (No. 51).

Presidents will also be more willing to stand up against “the temporary delusions” of the people, writes Publius, if they are subject to less frequent elections. The President will also possess greater firmness to defend against encroachments by the legislature. Publius believes that the tendency toward legislative supremacy is “almost irresistible” in republican governments. The President’s four-year

term will permit him to defend against legislative overreaching.

So too will the president’s re-eligibility—the lack of term limits in the original Constitution—tend towards stability and firmness. Even more important, “the desire of reward is one of the strongest incentives of human conduct.” Presidents who have “a hope of obtaining, by meriting” reelection to office will serve the people better than if they were term limited. Those who know they are limited to a single term, writes Publius, may be more likely to enrich themselves by corruption while they can.

Federalist No. 73–77: Executive Pay and Presidential Powers (Hamilton)Publius opens No. 73 noting the wisdom of the constitutional provision against al-tering the President’s pay during his term in office. Congress thus may not “reduce him by famine, or tempt him by largess.” The more powerful check is the Presi-dent’s veto. In fact, Publius describes the purpose of the veto as primarily to enable the President to defend himself against Congress and only secondarily to prevent the passage of bad laws.

Federalist No. 74, one of the shortest essays, defends three of the President’s powers: commander-in-chief, requiring opinions from his principle appointees and granting reprieves and pardons. The following essay addresses only the executive’s power, “to make treaties, provided two thirds of the senators present concur.” Treaties are manifestations of foreign policy, an area of executive authority, but also resemble legislation. Publius applauds the Constitution for giving the treaty power to the President while giving the Senate a check on that power.

The power to appoint subordinate officers and judges is the subject of No. 76 and the beginning of No. 77. Appointments, writes Publius, can be made either by “a single man, or in a select assembly of a moderate number, or in a single man with the concurrence of such an assembly.” It would be impractical to expect the people to elect all of these officials. Furthermore, “one man of discernment is better fitted to analyze and estimate” potential appointees than either the people at large or a large legislative body. The Senate will be unlikely to deny confirmation without “strong reasons for the refusal.”

Publius concludes his eleven essays on the executive returning to some of the least controversial powers and responsibilities of the President and to “his being at all times liable to impeachment, trial, dismission from office, incapacity to serve in any other, and to the forfeiture of life and estate by subsequent prosecution.”

“ a feeble execuTive implies

a feeble execuTioN of The

goverNmeNT [which is]

buT aNoTher phrase for

bad execuTioN; aNd a

goverNmeNT ill execuTed,

whaTever iT may be iN

Theory, musT be, iN pracTice,

a bad goverNmeNT.”

6 LIVING LIBERTY

he Citizenship & Governance Center is pleased to welcome Diana Cieslak as its

new policy analyst. A former secondary school teacher, Diana received her Bachelor of Arts de-gree from Hillsdale College where she majored in History, minored in French and earned teach-ing credentials in both subjects. Diana focused on American History at Hillsdale, but also spent a

summer studying British history at Ox-ford University and French at L’Institut de Touraine in France’s Loire Valley.

Diana is a native mid-westerner and former homeschooler. A direct descendent of Pilgrim leader William Bradford, she was raised to be proud of her American heritage. Her passion for liberty was roused when, as a high school student, she studied the writings of Frederick Bastiat and the principles of our American Founding. Further reading and study at Hillsdale turned Diana into an American History enthusiast and convinced her that our founding principles remain essential

to our continued freedom and prosperity.Following a semester of student teaching in a

public high school in Michigan, Diana chose to follow her interest in Western American History to Seattle. She spent a year teaching seventh and eighth grade in a classical academy on Seattle’s south side before deciding to synthesize her love of American History with current issues by joining our team at EFF. With her strong background in the history of personal liberty and limited, accountable government, we look forward to all that she will bring.

Leveraging her teaching experience, Diana also will contribute to some exciting upcoming projects in our Education Reform Center. With her experience in a variety of educational settings—from both sides of the desk—we look forward to her contributions to promoting education freedom in our state and beyond.

hen it comes to building new boats, Washington State Ferries and its parent agency, Washington

State Department of Transportation, might as well adopt that old depression-era song, “Buddy, can you spare a dime?”

Despite years of expressed need, sometimes bordering on panic, and promises from both the Legislature and WSF to build them, the list of new boats is as empty as a beggar’s tin cup.

It’s been almost ten years since ferry patrons had a spin on a new one.

According to Ferry Fleet Guide, a brochure published by DOT, the three newest boats in the WSF fleet are the 202-car Jumbo Mark II Class ferries, Tacoma (1997), Wenatchee (1998), and Puyallup (1999).

We were wearing polyester leisure suits and disco dancing to the Bee Gees when the six Issaquah Class ferries were built between 1979 and 1982.

For construction dates of others in the fleet, you have to go pretty far back in time—back to the days of black and white TV.

Since the Puyallup, new ferries have been promised—legislation in both 2001 and 2003 called for them—without any being delivered so often that it’s become a stuck record. Let’s not ask to be shown the money.

Who runs this show? The spare-change guy who’s a fixture on the Interstate 5 northbound off-ramp at NE 45th Street couldn’t do any worse. At least he honestly admits the cash you give him will be spent on beer and smokes.

WSF acknowledges the need to get cracking on new boats. From its Web site (http://www.wsdot.wa.gov/Projects/Ferries/NewVessel/):

“Currently, there are 24 auto-passenger ferries in the WSF fleet. Many of these ferries are old and nearing the end of their expected service life. Four 80-year-old ferries that served the Port Townsend / Keystone and San Juan Islands routes were retired in November 2007. Of the remaining ferries, nine are between 40 and 60 years old—these nine ferries must also be replaced in the next 20 years.”

While WSF claims to be on track to build five new ferries in the next four years (two 64-car Island Home-class and three 144-car boats), the jury is out on that time-table, with some contending it’s rose-colored-glasses overly optimistic.

And the state’s ability to pay for the boats is in doubt since looming disparities between expected revenue and its appetite for spending increasingly redden, while costs (labor, materials, more expensive regulatory compliance) to build them go up, up, up every day.

One inside-WSF wag went so far as to say that the money for new 144-car boats will run out at just over one and one-half boats, not the three promised by WSF.

Which half will we then get? Upper or lower? Can’t say bow or stern since they’re all double-enders.

After passage of the Nickel Package gas tax increase in 2003, WSF swore up and down that new ferries were a-comin’ even to the extent of promising one by March 2009.

Problem is Ferries also promised that the first new one would be on the water in December 2007 and the second by August of this year—the March 2009 boat was to be number three with the fourth to be launched in June 2013.

So far, nada in the Nickel Package new boat department.Good thing our pal at the 45th Street off ramp wasn’t

waiting for one of these ships to come in.As it stands today, WSF is promising the first new Island

Home boat by Spring 2010 with the second late in 2010. New 144-car boats won’t appear until well over three years from now, with the first theoretically set for Winter/Spring 2011, the second Fall 2011, and the third Spring 2012.

“. . . higher taxes, money wasted in the bureaucratic shuffling of papers and spinning of wheels, but no new

ferries get built.”

FIND OUT MOREat www.ferry-tales.org

Is there a check in the mail for them?The state has promised new boats nigh onto forever, but

they never appear—why should anyone expect anything different now? Pretty much the same bunch is in charge in the legislature in Olympia—they orate, fulminate, and berate then hike taxes and pass a few laws demanding boats be built all the while posing for cameras and sending out junk mail to constituents bragging about their accomplishments.

Net, net, net change, however, is only higher taxes, money wasted in the bureaucratic shuffling of papers and spinning of wheels, but no new ferries get built.

Don’t think apparatchiks in WSF aren’t watching this knowing full well that collectively Olympia is an empty suit with nothing but talk, talk, talk. In the meantime, the mice have plenty of room, time and money to play since the cat is far, far away...and sleeping to boot.

In other words, it’s business as usual.New ferries? As for me and mine, we’ll believe it when

we see it - but I won’t hold my breath.

by Scott St. Clair

Buddy, can you spare a new ferry?

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A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION 7

I would like to take a moment to publicly thank each and every CAN Member who was able to join us at the Colman Dock for our Ferry Tales event. All 17 of you made a tre-mendous impact in your efforts to educate the ferry riders of Washing-ton and to spur them to action.

The event marks only the beginning of the possibilities of the Citizen Action Network. These 17 volunteers have demonstrated what kind of change will take place when like-minded individuals band together to take action on a situation. As we look towards the future, I envision similar events taking place in communities all across Washington as CAN members come together to impact the issues that they hold dear.

If you would like to join the Citizen Action Net-work, please visit www.effcan.org.

here comes a time in every think tank’s life when its analysts decide to (temporarily) stop writing

policy papers and start (aggressively) warming some backsides.

EFF has been investigating, writing policy papers, tes-tifying and proposing solutions to the Washington State Ferry (WSF) mess for more than a decade—no joke, just type in “ferries” in the search engine of our homepage.

We’ve made small steps toward accountability over the years, but nothing like what we hope to achieve with the launch of our new website, ferry-tales.org.

Why now? Because WSF has cre-ated a perfect storm—especially over the last year. Delays, indeci-sion, incompetence, boat break-downs, apologies, even prayers, and a setting that creates the perfect context for cries of doom and more cash—or for a complete overhaul of the ferry system from the outside in. If we don’t deliberately act to set the tone of the conversation, WSF will.

Why should you care about ferries if you don’t ride them? Because you, Washington tax-payer, contribute approximately 9 cents a gallon to the ferry fund every time you fill up your gas tank.

The only solution that WSF advocates is more money. More of your money that is, and more funds to schlep to the bottom of Puget Sound, along with any hope of real reform.

In an effort to put all of WSF’s problems in the proper context, our investigative reporter Scott St. Clair, has been diligently airing WSF’s dirty laundry in a series of articles designed to find out what black hole our tax dollars are being dumped down, why we don’t have new boats despite years of promises and who is responsible for these failures, among other questions.

EFF took on WSF because we see it as a major cat-egory of state government that lacks accountability. But it isn’t just WSF management that’s at fault; it’s a serious leadership deficit that has permeated the legislature and the governor’s office for years (regardless of who ran them). For some reason, WSF gets swept under the rug year after year. The legislature and governor ignored 20 consecutive years of failed WSF financial audits, and now they are ignoring last year’s performance audit that could save taxpayers $100 million and also provides strong evidence that unions have more control over ferry sailing schedules than passenger demand.

To kick off the launch of our ferry tales site, EFF staff and 17 CAN members gathered at the Colman dock in downtown Seattle and handed out 2,000 flyers with teas-ers and a call to visit our new site for action items.

The response from ferry riders was beyond what we had hoped. The majority of people were very receptive, and every bit as mad as we were! We had quite a few rid-ers stop and express their thanks to us for talking about the issues we raised. Some riders even asked for a hand-ful that they could take with them and pass out on the ferry themselves!

It’s amazing what people will do when they are angry. We just need to arm them with information and an action plan, and that’s exactly what ferry-tales.org does! Our CAN members reached a whole new group of people who had never heard of EFF, and energized them about an issue that matters to them.

It was truly an encouraging and exciting thing to watch. Check out the site yourself! www.ferry-tales.org.

by Amber Gunn

by Lasse Lund

A NOTEabout our CAN Members:

Buddy, can you spare a new ferry?

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Molly Buccola Keith Weaver Edel Sokol Ila Gluhm Jim Johnson Marilyn Robertson Dr. Don KeltsWedny Birnbaum

George Rickle Ayvon Card Dave Card Jerry Buccola Kay Buccola Katie Jo BuccolaJill Buccola Haley BuccolaJenny Buccola

Our thanks go out to these CAN Volunteers:

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can memBers roll out ferrY tales In downtown seattle

8 LIVING LIBERTY

ecently a Florida newspaper revealed that it had found 30,000 likely felons on the state’s voter roll,

and so informed Florida Secretary of State Kurt Brown-ing. He admitted that the information was likely true, and that his staff was working hard to remove ineligible felons from the rolls.

Also recently, a KIRO-TV investigative reporter informed Washington’s Secretary of State that he had found 24,000 likely felons on the state’s vote roll, based on the felon database maintained by Washington’s Department of Corrections. Sam Reed’s response? Instead of digging into the information to see if any felons were actually still on the rolls, he immediately attacked the veracity of the reporter’s story, calling his information “unreliable.”

The KIRO reporter came to us and asked if we would comment on the story. We said yes because, after examining the details, we were convinced of the truth of the story, and because we saw it as another example of a disturbing habit Secretary Reed has shown of taking the easy road when it comes to election security. (Check out the story on underage voters in this edition of Living Liberty for another example of this habit.)

After the 2004 gubernatorial race, a Chelan County judge determined that more than 1,300 felons had voted illegally in the election, all of whom were quickly removed from the voter rolls in the month following the court decision. Then in 2006 the Secretary of State created a new statewide voter database in order to comply with the federal Help America Vote Act, and as required by state law, started searching it for ineligible voters, including felons.

Reed’s staff used a variety of databases for this search, including records from the State Patrol, the

by Jonathan BechtleNot perfection, just progress

R Department of Corrections, the Administrator of the Courts and county clerks. But in early 2006, a trial court ruled that the Washington law which prevented felons from voting until they had completed their entire sentence was unconstitutional: Those who had done everything except pay restitution could vote. That upset

the applecart for Reed’s felon voter search, which he quickly restricted to looking only for felons who were still under the custody of the Department of Corrections (i.e. in prison, on parole or on probation). About a year later, the Washington Supreme Court reversed the lower court decision and upheld the state law.

During that period, the legislature considered a bill to restore felon’s rights automatically after they got out of prison, a bill Secretary Reed supported. The bill was defeated. So, by August 2007, the status quo had been restored: Both the legislature and the courts had rejected

a change in the felon voter law, and Reed could go back to a broad search for felon voters.

But he decided that would be too hard. The felon databases had errors, the search would take a lot of work and it would be easier to just act as though the courts had ruled the other way and search only for felons under the active control of the Department of Corrections. So his staff wrote their software search program to ignore automatically anyone on the voter roll who had committed a felony and finished their prison sentence/probation prior to 2006.

That brings us to the KIRO story, in which the reporter took a look at all felons, not just the post-2006 ones, and found 24,000 active on the voter roll (dwarfing the 11,000 Reed has removed since 2006). Not all of those are ineligible to vote, as some have had their rights restored, but even Secretary Reed’s staff admits that almost half are probably ineligible felons.

But he continues to refuse to address them because the data is “unreliable,” and therefore would require some hard work to verify. But whoever said keeping elections clean was easy? We don’t expect the voter rolls to be perfect—they never will be. But we do expect the Secretary of State to do everything he can to remove ineligible voters from the rolls when he finds out about them.

That’s all we ask. Just start working on the list. Follow the law.

name my cars. Right now I’m driving the “Old Girl.” It is my left over soccer mom vehi-

cle—a classic red ’98 Ford Windstar. (Sometimes I climb in and I think I can still smell my son’s football practice gear!) Over the years there has been The Mav, Old Red, the Bullet and my personal favorite, OPF (Old Paid For.) OPF was a 1978 white Mercury Zephyr sedan with a red vinyl top. You don’t see many vinyl tops anymore. There is a reason for that. After about 10 years, the vinyl starts cracking and peeling off in strips that no amount of Gorilla Glue will hold.

I drove OPF while my husband started his own busi-ness. OPF was paid for before we started our family and, with no car payment, it was easier for me to stay home while the kids were young. The red velour interior was soon trashed because I let the darlings eat in their car seats to gain a few minutes of quiet while I drove. Even-tually OPF became embarrassing to drive—actually it was mortifying to see people laughing at me at stop lights. I didn’t want to be a proud person but that was almost more humility than I could stand.

I continued to drive OPF for years with vinyl pealing off, unable to have other adults ride in the car without first signing a waiver. As soon as my kids were out of their car seats and had the tiniest awareness of the world, they would ride lying down so no one could see them through the windows. But I continued to drive OPF for

one reason and one reason only: I was waiting until I could afford a nicer car.

Waiting. OPF became the daily object lesson for my children for one of life’s greatest financial lessons. Wait until you have the money before you make a purchase. They begged me to borrow money from my parents. They offered to give up their allowance and put it towards the new car fund. At eight years old my son once told me he would refuse to get his license if he didn’t have another car to drive! (Why that seemed like a dire threat, I could never understand.)

All of my children had opportunities to share in the joy of waiting.

“No, you can not borrow on next week’s allowance to buy a new G.I. Joe today.”

“No, I will not pay you today for mowing the yard next weekend.”

“No, you cannot promise me to do your chores with a cheerful attitude this Friday—so I will pay you early.”

In each discussion, they would start to make their case “more forcefully” as to why going into debt in their particular situation made sense. No matter what the cir-cumstance, no matter which child I was talking to, the discussion would always end the same.

“Look in the driveway. Why should I have to wait alone?”

I’m not an economist. I freely admit the current financial crisis

is more complicated than I will ever understand. Yet, sometimes when I hear commentators talk about bad mortgage loans and bad banking prac-tices I think of OPF and human nature. When a person has no job, no credit and driving their own OPF, why are they at the bank applying for a mortgage? Can I ask an honest question? If I take out an unsecured $500,000 mortgage I know I cannot repay, why is it the fault of the bank when I cannot make my house payment?

As we parent our children to appreciate and trea-sure the freedom they have in America, there may be no greater value we can pass on to them, than to value personal responsibility—which may simply look like waiting. We are leaving this next generation with an inheritance of trillions of dollars of debt and it breaks my heart. I don’t have global, complicated answers but doesn’t it make sense that economic freedom starts with each of us learning to wait and buy what we can afford? I may hold on to my soccer mom van for several years. I could easily slip in my walker where the football gear used to go.

FIND OUT MORE OLINEw w w.effwa.orgw w w.libertyliVe.org

“ ...there may be no greater Value we can PaSS on to them, than to Value personal responsIBIlItY...”

by Judy ParkinsDiary of a freedom loving mom

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A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION 9

lection security is back in the news. And while media pundits and talking heads look at the is-

sue about once every four years, the Evergreen Free-dom Foundation has worked diligently for years to pro-vide research and recommendations to the legislature and elections officials. But progress sometimes requires more than a simple recommendation. Recognizing this, EFF attorneys have filed a lawsuit against Secretary of State Sam Reed for his refusal to prevent ineligible vot-ers from registering to vote.

Our state constitution says that citizens must be 18 to cast a vote. State law allows 17 year-olds to register to vote if they will be 18 by the next election. But an improper registration can be created when an application is accepted from a person who will not reach the age of 18 before the next election.

Unfortunately, because some elections officers are unwilling to outright reject an underage registration, some counties have resorted to unlawfully sticking these applications in a drawer, often for months at a time. This improper procedure has led to unnecessary complications that create election errors and dilute legal votes. Our researchers discovered more than 16,000 underage registrations from over the last eight years. Dozens of these teens have received ballots and cast votes.

We brought this issue to the Secretary of State’s attention and filed an administrative complaint in June 2008. An administrative law judge dismissed the complaint in August. The judge ruled that the Secretary of State is not responsible for preventing illegal registrations but only for removing them from the voter rolls when they are discovered. She said the Secretary of State’s efforts

to ensure the accuracy of the voter rolls were “reasonable,” and found no violation in the county auditors’ practice of holding on to underage registrations until the voter is 18.

We requested an review of the decision, and because administrative law dictates how these matters are conducted, it was reviewed by Nixon Handy, the Secretary of State’s Director of Elections. In his final decision issued on September 12, Handy upheld the majority of the administrative law judge’s ruling.

Handy disagreed with our legal arguments, but conceded that the problem could be improved by

developing written procedures for county auditors when handling underage registrations. But this hardly ensures that only legal voters are on the rolls and able to vote. The ruling did not acknowledge any duty on the Secretary of State’s part to prevent ineligible voters from being added to the voter list.

We believe the accuracy of the voter database is a critical first step for fair and accurate elections, so we filed a petition in Thurston County Superior Court on October 8. If we win, we’ll get clarification from the court about the Secretary of State’s duty to prevent invalid registrations, and we’ll be able to close a loophole that could be addressed easily. The case is not expedited, so it won’t disrupt the November election. Instead, we are seeking a long-term solution to a simple problem.

EFF legal counsel Jonathan Bechtle said it best: “Everyone can agree that Washington needs honest and accurate elections. All we are asking is that the Secretary of State live up to the same standard we expect from convenience store clerks selling alcohol.”

by Michael Reitz

EFF sues Secretary of State for allowing underage voter registration

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More than 16,000 registrations from underage voters over eight years

“the Secretary of State ShoulD liVe uP to the Same StanDarD we expect from conVenIence store clerks

sellIng alcohol.”

Purcell v. Gonzalez• (2006). The U.S. Supreme Court reinstated an Arizona law that requires voters to present proof of citizenship when they register to vote. “Voter fraud drives honest citizens out of the democratic process and breeds distrust of our government. Voters who fear their legitimate votes will be outweighed by fraudulent ones will feel disenfranchised.” This case is still ongoing,

Crawford v. Marion County Election •Board (2008). The U.S. Supreme Court ruled it is constitutional for states to require photo identification for in-person voters. EFF filed an amicus brief in sup-port of this case.

Florida NAACP v. Browning• (2008). The 11th U.S. Circuit Court of Appeals upheld Florida’s requirement that the driver’s license or Social Security number on a registration form be verified before a voter can be registered to vote.

Edelman v. Reed• (2008). EFF filed a law-suit against Secretary of State Reed for allowing 16 and 17-year-old voters to register to vote, violating the state constitution and federal laws that require him to ensure the state voter roll contains only legal voters. The case is pending in Thur-ston County Superior Court.

Miller v. ACORN• (2008). Ohio-based Buckeye Insti-tute filed a state RICO action against ACORN for the group’s questionable voter registration prac-tices.

Ohio Republican Party v. Brunner• (2008). The 6th U.S. Circuit Court of Appeals ordered the Ohio Secretary of State to comply with federal requirements to match the identities of newly-registered voters against existing government data-bases. More than 200,000 new registra-tions have mismatched data. The U.S. Supreme Court reversed this decision in a 2-page expedited ruling.

n the weeks leading up to Election Day we have many national reports on voter fraud

and election security. Courts are frequently recognizing the need to improve voter confidence and the integrity of the election process. Here are just a few items.

Election Security

Litigation

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Registered voters: 3.5 millionCounties using vote-by-mail: 37

People who voted in the 2004 election: 2.8 millionMargin of victory in 2004 governor’s race: 133 votesKnown illegal ballots case in 2004 general election: 1,600

Felony convictions for illegal ballots cast in 2004 general election: 0Dead, duplicate or felon voters removed from voter rolls: 450,000

Non-citizens removed from voter rolls since 2006: 0

Dogs registered to vote: 1Known fraudulent voter registrations submitted by ACORN in 2006: 1,817

Likely felons still on the voter rolls: 24,000Underage voters registered since 2000: 16,126

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10 LIVING LIBERTY

he stunning financial events of recent weeks are assuring us that we will endure a recession that will last for a while. Some businesses will go under, perhaps

millions of jobs lost, and fear and uncertainty will dominate the capital markets and individual lives.

The Department of Treasury is starting to buy non-voting, senior preferred stock from some of the nation’s healthiest banks with orders to “deploy” the money in the lending markets. This is certainly a better plan than the original—to buy worthless mortgages from less healthy banks—but it might have been avoided if less complicated strategies had been deployed during this difficult time.

Six steps could have been taken that, in combination, might well have been adequate to restore stability in the credit markets. As Steve Forbes said on Fox News a few days ago, there is plenty of money in the system, but it is like a dam that has its pipes clogged. We need to unclog the pipes.

In my opinion, here’s how we can do that.

Repeal the Community Reinvestment Act, securitization of sub-prime 1) mortgages and other legislation that forced banks to make loans to people who are poor credit risks. These junk loans are at the root of today’s problems. If government is going to force banks to make horrible loans, government can’t be surprised when the whole deal goes sour.

Consider suspending or modifying the “mark-to-market” accounting rule that 2) was put into place in reaction to the Enron scandal. Essentially the rule requires assets to be accounted for at their present day value, not what they might have been worth six months ago. With housing prices dropping, those assets are less valuable today than they were before. One banker we talked to, who essentially supports mark-to-market, said a suspension of the rule for six to eighteen

months is a good idea because, “there is no market today.” Others I have spoken to say this simple change to an arbitrary rule could solve as much as 70 percent of the problem all by itself.

Congress should eliminate the capital gains tax. Astonishingly, Sen. Barack 3) Obama proposes to raise it, draining much needed job-creating capital from the system. Until Congress gets around to doing the right thing, Treasury should redefine capital gains to reflect inflation. The Wall Street Journal’s John Fund and Americans for Tax Reform’s Grover Norquist both point out that capital gains are not always what they appear to be. For example, you buy some stock at $100 per share, hold it for five years and then resell it for $150. It looks like a $50 per share capital gain, but inflation has eroded part of that. But you will pay taxes on the entire gain.

Consider temporarily suspending short selling. The Securities and Exchange 4) Commission can do this. (Long-term suspension might create a worse problem down the line.) You might remember that President Nixon’s artificial price control regime in the early 1970s set the stage for President Ford’s awful “Whip Inflation Now” program in the mid-70s and the hyperinflation of the late 1970s and early 1980’s. However, a temporary suspension of short selling could give us some time for some normalcy to return to the credit markets so that we can begin to turn things around.

Allow companies to bring their foreign earnings home and invest them in 5) troubled assets. As it is, companies currently pay taxes in other countries where they do business. If they bring those earnings home, they have to pay the additional U.S. income tax. It’s important to remember that the U.S. has a 35 percent corporate tax rate—the highest in the Western world. This is a real impediment to competing internationally.

It might seem like a small thing that affects 6) relatively few people, but we should suspend the rule that requires individuals turning 70 ½ years old to begin using their IRAs. Why should we force these people to start cashing in on their portfolios that likely lost a great deal of value recently?

We need greater transparency in the entire system. Federal agencies like the Department of Treasury, FDIC, SEC, and the Federal Reserve need to be more transparent. And we certainly need an exit strategy for all of the financial socialization that is occurring during the bailout process. Treasury Secretary Hank “I’ve-got-a-new-plan-every-day” Paulson, and his successor, need to devise a plan that gets government out of the way.

And Fannie Mae and Freddie Mac need to be privatized.One more thing, as much as I dislike special prosecutors, we need one in this case.

Investigate the predatory lenders and anybody else in the private sector that is culpable. Investigate members of Congress and the agencies they oversee. Not only do we need to unclog the dam, we need to clean up the corruption.

We need to rebuild our country. It belongs to us.

by Bob WilliamsSo how can we get out of this situation... without becoming France?

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The budgeT should be balaNced, The Treasury should be refilled, public debT should be reduced, The arrogaNce of officialdom should be Tempered aNd coNTrolled, aNd assisTaNce To foreigN laNds should be curTailed lesT rome become baNkrupT.

people musT agaiN learN To work, iNsTead of liviNg oN public assisTaNce…

– cicero, 55 b.c.

“ iT’s imporTaNT To remember ThaT The u.s. has a 35 perceNT corporaTe Tax raTe—The highesT iN The wesTerN world. This is a real impedimeNT To compeTiNg iNTerNaTioNally.”

Author Session: To Protect and Maintain Individual Rights

Did you know that the Washington State Constitution guarantees you more personal rights than our national Constitution? Co-author Mike Re-itz tackles this question and many more like it in his new book To Protect and Maintain Individual Rights. During this Author Session, you will have the chance to go in depth with Mike as he explains how he came to write this important work and expounds on the content within.

Tuesday, November 18, 2008, 6pm – 8pmFairhaven Public Library1117 12th St, Bellingham, WA

Tuesday, December 2, 2008, 6pm – 7:30pmDiscovery Institute208 Columbia Street Seattle, WA 98104

First Principles of Freedom: The Declaration of Independence

From the same instructor who brought you the original First Principles of Freedom course comes a new class that focuses on the Declaration of Independence. Trent England will be sharing the history of this im-portant document and its relevance for today’s citizens. Whether you are a First Principles of Freedom veteran or a first time attendee, this course has something for everyone.

December 9, 2008 at 6pm Discovery Institute208 Columbia Street Seattle, WA 98104

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CL AssEsif you would like to rSVP for a can class, please call 360-956-3482 or send an email to llund@effwa.org.

Don’t see a Class in your area? Contact Lasse @ 360-956-3482 about how you can help bring a CAN class to your community.

A PUBLICATION OF THE EVERGREEN FREEDOM FOUNDATION 11

Yes, i waNT To iNvesT iN The evergreeN freedom fouNdaTioN.

Dear Friend of EFF,

While we welcome every gift, our greatest need is reliable monthly support. It is imperative for reaching our goals. Please consider monthly giving as a way to invest in the cause of freedom. Our secure e-Giving System ensures that more of your contribution goes directly to our work.

Cordially,

Please mail or fax in this form (fax 360-352-1874) or call 360-956-3482. We will send you a confirmation letter for your records.

Your Donations to EFF are Tax Deductible!

Bank Debit/Credit Card Donation Authorization I request my bank or credit card company to transfer funds in the amount of $ each monthuntil further notice. I understand that I am in full control of my donation, and that I can decide to make any changes or discontinue the service at any time by calling 360-956-3482 or writing to EFF.

Signature Date(required for bank and credit card donations)

Checking Account–e-Giving Systems (Attach a voided check)

Savings Account–e-Giving Systems (Attach a voided deposit slip)

Please indicate your preferred withdrawal date: 1st 10th 20th

VISA MASTERCARD DISCOVER AMERICAN ExPRESS

Credit card # Expiration date:

Personal Information

Name Company

Address City, State, Zip

Phone E-mail

...because freedom maTTers!

I would like to give a one time gift of $

t’s hard to believe, but Christmas is just around the corner. My sister is one of those people who has most

of her Christmas shopping done by now. I’m the person that makes my list of people I need to give gifts to about now.

One of the problems I regularly face is what to get those people on my list who really don’t need anything else. They really don’t want another knick-knack sitting on their shelf to collect dust. And they don’t want more to eat (especially not during the holidays when they are eating too much already).

This year I have come up with a great idea! I’m going to give my family and friends a gift membership to EFF or a Flunked DVD…or both. It’s easy to do and will give them the benefit of EFF’s inside information all year around through EFF’s great Living Liberty newsletter.

Maybe they will share the Flunked DVD with their local elected officials or school activists.

If you are interested in giving your family and friends a great Christmas gift, please consider an EFF

Please attach the name and address for each gift membership and/or copy of Flunked. Enclose this coupon, along with the names and addresses for each gift in the enclosed envelope. We will send out a Gift Certificate with your name listed as the giver.

____ One-Year Gift Memberships at $50 each____ Copies of Flunked DVD at $25 each____ Gift Memberships plus Flunked DVDs at the discounted rate of $70 each

____ Total

Method of payment:

by Juliana McMahanChristmas Gift Ideas

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membership and/or Flunked DVD. It’s easy to do and will be appreciated long after the Christmas Season has passed.

Merry Christmas (early)!

12 LIVING LIBERTY

very year my husband’s VFW Post hosts an obser-vance of Veteran’s Day at the Veteran’s Park in

Lynnwood, WA. The beauti-ful setting is bathed in flags. The largest flag adorns the pole in the center, and is set at half staff. Bricks encir-cle the park, each one lov-ingly placed and showing the name and theater of ser-vice of generations of vet-erans. A young boy sits on the grass, pensively tracing a name on one of the bricks with his finger. Among the hundreds, there are five bricks with the name Endicott on them, representing five generations of service to America.

As the parking lot fills, I watch people arrive: the senior-age moms and dads, younger couples with chil-dren carrying little flags, many single individuals car-rying their singular memories of honorable service, unspeakable sacrifice and loss. Most of the people are smiling and talking together on this special day.

f you are being forced to take an IRA withdrawal (because you

are 70 ½ and older), there is a way for you to invest up to $100,000 in Ev-ergreen Freedom Foundation with-out paying a penny of federal income tax. Many of you took advantage of this last year before the December 31 deadline. Now it is available once again thanks to the recent financial “bail-out” bill that was passed by Congress. The new provi-sion covers calendar years 2008 and 2009.

The Charitable IRA Rollover permits individuals age 70 ½ and older to make tax-free charitable gifts totaling up to $100,000 from a traditional Individual Retirement Account (IRA) and Roth IRAs. If you are 70 ½, it is mandatory under federal law that you take some distribution from your IRA account. The Rollover sends your mandatory IRA distribution directly to a 501(c)(3) organization, and doesn’t impact your adjusted gross income (AGI) at all!

Note: Because this does not count as gross income, this donation does not count as a line-item tax deduction. Your tax advantage comes by not having to report it as gross income.

World War II veterans come: silver-haired, wiry, robust men and women who get there on their own, many wear-

ing decorated caps. White-haired veterans, holding tightly to their flag, are pushed in wheelchairs by loved ones. Fewer and fewer come each year. Some Korean War and Viet Nam veterans arrive on motorcycles with POW and American flags streaming. They are the quiet ones who pace the sidelines or sit

on a back bench, remembering. I wonder whether the younger ones I see served in Desert Storm, Afghanistan or Iraq.

There is always the same feeling of anticipation, tinged with pride and sadness. The crowd settles down. Chil-dren become quiet. The wind blows softly, ruffling the many flags.

We pledge our allegiance to the flag of the United States of America. City officials speak, the bagpiper stirs our souls. A husband silently drops his wife’s hand and makes his way qui-etly to the periphery of the crowd to be alone for a bit. A young person reads a patriotic essay about a beloved family member who served or is serving in the Armed Forces. We sing God Bless America and the uplifted faces are radiant, as though the sun were out on this cold winter day. The moment of silence is shattered by the haunting melody of TAPS. Heads go down. There are tears.

Why do we come? To remember all who served and to honor those who gave the ultimate sacrifice. We come to renew our dedication to preserving freedom and liberty in this great land. Why else would we endure the chill of a November day until the last note of Amazing Grace sends us on our way? The patriotic heart of America’s people still beats and love of country endures.

Irene Endicott, Coordinator, EFF Legacy Society and wife of WWII veteran, Bill Endicott

Who will benefit from this opportunity? People who don’t itemize their deductions. Nearly two-thirds of Americans don’t itemize deductions on their tax returns and, therefore, don’t benefit from a chari-table contribution tax deduction. Many individuals in states without income tax—like Washington—typically do not itemize because there is no state tax to deduct against federal taxes. You won’t need to itemize to real-ize the savings.

Individuals who’ve reached their charitable giving limit. Those who do itemize their taxes are limited to deducting 50 percent of their AGI for charitable gifts. Gifts from your IRA are excluded from this AGI limitation. If you’ve reached your limit, the Rollover will allow you to give more.

Taxpayers whose tax deductions decrease as their income increases. Many federal tax deductions—for example medical expenses, non-business casualty losses, dependent and personal exemptions—become smaller as an individual’s income increases. Instead of taking your distribution and counting it toward your income, the Rollover never is reflected in your AGI and you still qualify for other tax deductions.

What does this mean? If you are 70 ½ years old or older, you are required to take a mandatory distribution from a qualifying IRA, which affects your AGI. To get around this, you can use your distribution to fulfill your charitable giving without increasing your income. If you and your spouse both have qualifying IRA’s, each of you can roll over up to $100,000—or $200,000 total—to a public charity, such as the Evergreen Freedom Foundation.

How can you take advantage of this opportunity? The process is easy. All you need to do is let the company holding your IRA know that you want to make a rollover to a qualified charitable organization—like the Evergreen Freedom Foundation—and provide the address of the charitable organization. The financial institution holding your IRA will make the distribution directly to the non-profit charity. That’s it!

To enjoy the full benefit of this opportunity, this year’s transfer must be completed prior to December 31. If you have questions, please call Juliana McMahan at (360) 956-3482.

by Irene EndicottVeteran’s Day

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by Juliana McMahanTax law changes reinstate IRA rollover provisions

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