Medicare Reform

I have heard critics of the Ryan-Wyden plan claim that it will end Medicare "as we know it." Well, Medicare "as we know it" is going to end, whether the critics want it to end or not.  It is only a question of when and how destructive the end will be.

I applaud this bipartisan effort to reform a program that will, left untouched, ruin the country. I will be curious to see how the administration reacts, whether it has the political courage to offer a rational alternative or will resort to demagoguery.

A Big Step

Cracking Down on Warming Bloggers

In the wake of Climategate 2, the release of another 5,000 emails from the notorious East Anglia crew, the authorities are starting to play hard ball (see article linked below).

According to another source, the latest email dump has a twist--rather than just communiques between scientists on how to manipulate data, smear critics, and subvert peer review, this batch includes emails with government officials. No wonder these guys are getting desperate.

 British Poice Raid Climategate Blogger's Home

Infrastructure Spending

The article linked below sheds some much needed light on the alleged benefits of spending on infrastructure by the federal government.

Limited Mileage When Feds Spend

Whither compromise?

For those who believe that compromise in Washington is the sine qua non of how politics should work, I have a question. What gives with Obama?

Obama wants to extend the payroll tax cut, and fund it with a surtax on millionaires. Republicans believe, correctly, that this is not a pro-growth economic policy. But, they are willing to go along with the extension if  Obama will agree to move forward on the Keystone XL pipeline, and they propose to fund the tax cut in other ways. That sounds like compromise to me. But Obama has threatened a veto, and Harry Reid says he won't even allow such a proposal to come to a vote in the Senate. This is the same Harry Reid who thinks the concept that millionaires create jobs is as mythical as the unicorn, but I digress.

In other words, Republicans are saying let's compromise. Obama gets his payroll tax cut, and in return they ask for a project that will create jobs and allow the country to lessen its dependence on oil from the Mideast. Sounds like a pretty reasonable compromise to me.

It seems to me that Obama is now in the unenviable position of having to explain to the middle class, who he claims to champion, that he will not extend their payroll tax cut if it means creating more jobs and improving the nation's energy situation. Then again, he recently said that the payroll tax cut would create more jobs than the Keystone XL pipeline. Which means that, like Harry Reid, he is either astonishingly ignorant or couldn't care less whether his utterances have any connection to reality. He will have to rely heavily on his spin doctors and hope that the public is not paying attention.

Tax Rates, Inequality, and the 1%

As the article linked below correctly points out, those who obsess over income inequality should hope and pray for stock market crashes and deep recessions. They are a great recipe for reducing income inequality.

Tax Rates, Inequality, and the 1%

The Norquist Myth

Following is an article by Charles Krauthammer. It sheds some much needed light on what is arguably the most important debate currently being waged in Washington.

I would add to Krauthammer's comments that, historically, whether tax rates on the rich are high (90%) or low (28%), revenues to the federal government remain fixed at approximately 19% of GDP. Therefore, the key to more revenues is a growing economy and policies that promote such growth, as opposed to the policies pursued over the past few years. I fear that in the pursuit of "fairness," progressives will bring the economy down.

The Grover Norquist Tax Myth

SEIU: Taking Money from the Handicapped

Robert and Patricia Haynes live in Michigan. They have two adult children, both of whom have cerebral palsy. The parents are the caregivers for the adult children.  The Hayneses receive assistance from the state in the form of Medicaid. So far, so good.

But there's a problem. According to state law, the Haynes are state employees since they care for their children. This means that they must pay dues to the Service Employees International Union (SEIU). Therefore, union dues are deducted from their Medicaid payments, even though the Haynes are not employed by the state in any real sense and they have no interest in belonging to a union.

According to the Examiner," Michigan Department of Community Health Director Olga Dazzo explained the process in to her members of her staff.  'MQC3 basically runs the program for SEIU and passes the union dues from the state to the union,' she wrote in an email obtained by the Mackinac Center. Initiated in 2006 under then-Gov. Jennifer Granholm, D-Mich., the plan reportedly provides the SEIU with $6 million annually in union dues deducted from those Medicaid subsidies."

This is a good example of the money laundering scheme that exists between unions and democrats, both of which claim to be champions of the downtrodden.

The entire article is linked below for anyone who gives a damn.

SEIU Siphons "Dues" from Michigan Medicaid Program

Quote of the Day

… is from an 1835 “Minute” on India written by Thomas Babington Macaulay:

 "A government cannot be wrong in punishing fraud or force, but it is almost certain to be wrong if, abandoning its legitimate function, it tells private individuals that it knows their business better than they know it themselves."

From Cafe Hayek

Rooting for Failure

This will not be accurately portrayed by major media...

Rooting for Failure: Democrats Walk Away From Super Committee

Triumph Visits Occupy Wall Street

Axelrod: Obama's Hired Muscle

Is the Obama machine behind the attacks against Herman Cain? I don't know. But they have done this sort of thing before. More than once. No one would know who Obama is but for this type of campaign.

David Axelrod's Pattern of Sexual Misbehavior

Milton Friedman on Greed

Fun Facts

OK, here's a pop quiz. In what year did the U.S. federal government collect the most tax revenue in its history? (Jeopardy theme song playing) Give up? The answer is 2007, when it collected $2.568 billion. But wait. How can that be? What about those Bush tax cuts? Hmmm, quite a mystery. Maybe the conundrum can be solved by adjusting for inflation. Nope. The answer is still 2007. Well, what about tax revenues as a percentage of GDP? Got me there. In FY 2007 the percentage was 18.5%. The record is 20.9%, in 1944. But that 18.5% is still higher than the average from 1970-2000. So, how is it that the federal government got historically solid revenues after Bush cut taxes?

What has happened to revenues since FY2007? From FY2007 to FY2011 revenues fell $394 billion, and 4.1% as a percentage of GDP. Of course this is a result of the recession, but it's worth noting that bad economic times have not just hit the middle class. The rich also got poorer. From 2007-2009 the number of $1 million earners dropped by 40%. Their income dropped 48%. Federal taxes paid by this group dropped 43%.

The point of all these numbers is that it should be clear that the Bush tax cuts are not responsible for the fiscal mess we are in. While revenues have fallen in the past fews years due to the recession and a sluggish, fragile recovery, federal spending per year has increased by approximately $1 trillion. Presto, crippling deficits and debt, capital that is unavailable to the private sector, and an environment in which businesses are leary about hiring new employees.

Now, Obama wants more Keynsian stimulus to provide what he calls a "jolt" to the economy. The imagery is disturbing. It brings to mind a guy on the operating table who has flat-lined and the doctors use the shock paddles while yelling "Clear!" Perhaps that is the current state of the economy. But it is difficult to see how another, smaller jolt is going to help after the major jolt, aka Stimulus 1, has failed miserably. He ridicules Republicans for promoting the same old policies that haven't worked (tax cuts, reduced spending and fewer regulations) while simultaneously promoting policies that didn't work in the 1930's, haven't worked since then, and most recently haven't worked since he took office. It's bad enough that Obama knows nothing about economics. The bigger tragedy is that he thinks he does.

One more point. While Obama has been chastising Republicans for not bringing his "jobs bill" to a vote, Senate Majority leader Harry Reid prevented just that last night. Republicans in the Senate were happy to bring the bill to a vote. Granted, they knew it wouldn't pass, but so did Reid, because several Democrats (one suspects those up for election next year) won't vote for it. Reid broke long standing Senate rules to save Obama the embarrassment of having Democrats shoot down the bill. Don't expect any public acknowledgement of this from Obama. He will continue to smear Republicans as the only ones standing between the people and good jobs. He will, of course, know that he is being disingenuous (to be kind), but he'll say it anyway.

Figures from an article I read, which used: Source for budget numbers: The White House Office of Management and Budget, Table 1.3. Source for tax numbers: Internal Revenue Service, Table 1.1.

Random Thoughts...

 For what it's worth, some comments on items in the news...

1) Attorney General Eric Holder is either incompetent or a liar, or both. He testified last spring that he had first heard about operation Fast & Furious "a few weeks" earlier. We now know that he was told about it at least as early as summer of 2010. He should be fired.  But he won't be. No way Obama will fire a black Attorney General.

2) Can anyone explain how Obama's newly proposed "jobs bill" is anything other than Stimulus 2? More spending of money we don't have, more spending on infrastructure, more central planning. Wasn't Stimulus 1 supposed to fund infrastructure, aka "shovel ready projects"? Shovel ready projects have been replaced by projects that are "ready to go", which is nothing more than rhetorical sleight of hand intended to the ignorant masses. Obama recently mocked Republicans for proposing the same old ideas that, he says, don't work. No word from the White House on whether he grasped the irony.

He also said recently that there are 153 bridges in the country that are so dilapidated they are dangerous, so we must pass his bill. But he didn't tell us which bridges we should avoid. If these bridges actually exist, shouldn't he have named them? You know, in the interest of public safety?

3) Sen. Dick Durbin (D-IL) took to the Senate floor the other day to tell the public not to bank with Bank of America. BofA apparently aroused Durbin's ire by deciding to charge customers a $5 per month fee to use their debit cards. Bastards! What Durbin failed to mention is why BofA is charging the fee. Durbin himself included an amendment to the Dodd-Frank financial reform bill that limited the amount banks could charge retailers for accepting debit cards. Anyone who is reasonably familiar with how business works could have told Durbin that when government passes a law that reduces income, businesses will look for ways to recoup the loss. But Durbin is shocked that BofA acted in its own best interests and the interests of its shareholders. Durbin is a poster child for what happens to a politician after years of spending other people's money.

4) The Washington Post's attempt to destroy Rick Perry is both despicable and predictable. The Perry family leased the property, with a rock that had the word "Niggerhead" on it, for the purpose of hunting. The Perrys evidently sprayed paint over the offensive word and turned the rock over. This doesn't sound like the action of a racist, but the Post used unnamed sources and innuendo to smear Perry.

5) Some leading Democrats and liberal media pundits are quite enamored of the protesters known as Occupy Wall Street. These protesters are essentially a bunch of anti-capitalist, anti-profit, anti-business dimwits who think the minimum wage should be $20 per hour, that people have a "right" to a "living wage" regardless of employment status, and that all debt, of every type, should be erased. In other words, they are taking the lessons they learned from their college professors and trying to force their implementation. A self-avowed communist and former Obama czar, Van Jones, is a leading figure in the movement. But these knuckleheads are being cheered by so-called progressives. Have they learned nothing from history?

By comparison with the Tea Party movement, Occupy Wall Street is an incoherent mob. Some of these protesters are actually comparing themselves to the original Boston Tea Party, evidently unaware that Paul Revere and others in 1773 were protesting against higher taxes and intrusive government, concepts that are appalling to modern day redistributionists.

6) After throwing away over $500 million on loan guarantees to Solyndra, the administration is not only unapologetic, it is spending an additional $6 billion on green energy companies. The administration continues to believe that it is better equipped to determine the best use of capital than the private sector. This is the height of hubris. I have heard many on the left defend the administration's subsidizing of solar energy on the basis that China is pouring money into it and we can't get left behind. Their argument boils down to this: since the Chinese government is stupid enough to subsidize an energy source that can't survive on its own in a free market, we should be just as stupid. The "China does it" crowd also fails to mention that China is also pursuing all sources of energy, including coal and oil, which environmentalists in the U.S. are doing everything in their power to curtail. If we're going to use China as a shining example, let's at least try to follow their lead when they do something smart.

7) Speaking of China, some in Congress, primarily Democrats, think it's a good idea to punish the ChiComs for manipulating their currency. China may in fact be doing that, but it not clear that, on net, it does more harm to us than it does to them. In either event, slapping tariffs on Chinese goods will likely lead to retaliatory tariffs on our goods, aka, a trade war. Does Smoot-Hawley ring a bell?

Those who promote such measures are generally those who also bemoan our trade deficits. But trade deficits are as poorly understood by politicians as most other economic concepts. I have commented in the past about the fact that accounting for trade must consider two different elements, the current account and the capital account. When we hear about deficits, the reference is to the current account. But these deficits are offset by capital account surpluses. Google "cafe hayek trade deficts" for more on this. When considered in its entirety, trade is always, by definition, balanced. Viewed another way, if trade (or current account) surpluses are so desirable, why did we have surpluses in all but one year (1936) of the Great Depression? We have had these trade deficits every year since 1976. If they are as awful as we hear, how have we survived? The fact is that data indicates a strong correlation between expanding trade deficits and economic growth. Yet we constantly hear politicians bray that something must be done about these horrible things. And over such specious claims and worries about China's currency, some are willing to enter a trade war, which would be truly disastrous.

Monetary Policy

The following article from the Cato Institute does a good job explaining why interest rates should, and at some point must, go up.

The Federal Reserve's Flawed Approach to Monetary Policy

Unpatriotic Obama

There's no longer any doubt about it. Obama is not a patriot.

This isn't my assessment. It's his. In 2008 he accused Bush of being unpatriotic for raising the nation's debt by $4 trillion over 8 years.

Surely, then, when Obama has raised the debt by $4 trillion (and still rising) in only 2 1/2 years, he must be even more unpatriotic. Right? Anyone disagree?

Obama in 2008: "Adding $4 Trillion to National Debt is Unpatriotic"

Clinton's Surpluses

It's common knowledge that in the last few years of the Clinton administration, the budget was not just balanced, we actually had surpluses. Bill Clinton has claimed that he reduced the national debt by $360 billion in his last three years. But is it true?

Figures from the U.S. Treasury on total debt for fiscal years 1998-2001 are as follows (bear in mind that Clinton's last budget ended on 9/30/2001):

 Fiscal Yr. Year ending  National debt        Deficit

FY1998

09/30/1998

$5.526193 trillion

$113.05 billion

FY1999	09/30/1999	$5.656270 trillion	$130.08 billion
FY2000	09/29/2000	$5.674178 trillion	$17.91 billion
FY2001	09/28/2001	$5.807463 trillion	$133.29 billion

As one can see, the debt went up each year, and there were deficits each year. Each year of the Clinton administration saw deficits and rising debt. And Clinton clearly did not turn surpluses over to Bush, which he then squandered, as the conventional wisdom says. So how did this myth arise?

According to an article I recently read, the answer lies in the distinction between public debt and intragovernmental debt. Public debt is (you guessed it) debt held by the public. T-bills, bonds, what have you. Intragovernmental debt occurs when the government borrows money from itself, mostly from Social Security. Add the two together and you get total national debt.

What Clinton did over the last few years of his administration was pay down public debt. But he did this by borrowing more in the form of intragovernmental debt, again, mostly from Social Security.

From U.S. Treasury data:

Fiscal Year	End Date	Claimed Surplus	Public Debt	Intra-gov Holdings	Total National Debt
FY1997	09/30/1997		$3.789667T	$1.623478T	$5.413146T
FY1998	09/30/1998	$69.2B	$3.733864T  $55.8B	$1.792328T  $168.9B	$5.526193T  $113B
FY1999	09/30/1999	$122.7B	$3.636104T  $97.8B	$2.020166T  $227.8B	$5.656270T $130.1B
FY2000	09/29/2000	$230.0B	$3.405303T  $230.8B	$2.268874T  $248.7B	$5.674178T  $17.9B
FY2001	09/28/2001		$3.339310T  $66.0B	$2.468153T  $199.3B	$5.807463T  $133.3B

As one can see, over the years in question, public debt went down, but intragovernmental holdings and total national debt went up.

To be fair to Clinton, it's unlikely that this was his plan. By law, the Social Security Administration is required to take its surpluses and buy U.S Government securities, which are then sold and which then immediately become part of the national debt. During the dot-com boom of the late 1990's, payments to social security unexpectedly went way up. This may explain why the Clinton administration predicted in 1996 large deficits as far as the eye could see, and suddenly a couple of years later we have supposed "surpluses". The administration must have been shocked to see all this extra dough available, and, to his credit, he did pay down public debt. But the only way this can be characterized as surpluses is if one ignores the other element of the total national debt.

Thanks to political spin, a compliant media, and lack of awareness by the public of the arcane accounting methods of Washington, the myth of the Clinton surpluses was born and survives today.

None of this is meant to defend George Bush. But I think it's important to realize that when people say we should return to the tax rates of the Clinton years because, after all, we had surpluses then, that assertion is simply false. I also find it very interesting when I discover that what we have been told, ad nauseum, for several years, just ain't so.

It would appear that high unemployment is not just painful for the unemployed. With fewer FICA taxes coming into the government, it has less money to hide what it's been doing over the past few decades. If corporate CEO's pulled this kind of stuff, they'd go to jail.

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

Friedrich Hayek.

Eating Paul Krugman

I have long been on record as being highly skeptical of global warming alarmism. But when new information comes to light, I'm not afraid to admit that I may have been mistaken.

It turns out that if we don't stop CO2 emissions, aliens from outer space may decide to kill us. According to a joint study by Penn State and the NASA Planetary Science Division, one possible scenario is that extraterrestrials may decide that we are a threat to the intergalactic ecosystem and should therefore be destroyed.

The study says that extraterrestrial intelligence (ETI) "could attack and kill us, enslave us, or potentially even eat us. ETI could attack us out of selfishness or out of a more altruistic desire to protect the galaxy from us. We might be a threat to the galaxy just as we are a threat to our home planet."

This frightening scenario comes on the heels of New York Times writer Paul Krugman suggesting that if we were attacked by space aliens, it could be helpful to the economy.

This is a bit confusing. Attacked and eaten if we don't stop global warming, or attacked but it'll be good for the economy. Or maybe they attack but just eat Paul Krugman, which would make them vomit and they'd go look for food on some other planet.

 

I don't know how this is going to turn out, but just in case I think we'd better stop any activity that creates CO2 (except for breathing) and return to a prehistoric lifestyle. It won't be pleasant, but it beats being an entree for a Martian.

 

Green Jobs

Last year the mayor of Seattle, Mike McGinn, announced that the city had won a $20 million federal grant to "weatherize" homes. Specifically, the grant was supposed to create 2,000 jobs to retrofit 2,000 homes in poor neighborhoods. McGinn flew to D.C. where Joe Biden characterized the program as a "promise to boost the economy, reduce consumer bills and lower greenhouse gas emissions...a triple win." What's not to like? A government "investment" that creates jobs, reduces energy bills and saves the planet, all in one little grant.

So, over a year later, how is the program going?

As of last week, 3 homes have been weatherized and 14 jobs have been created. According to Michael Woo, director of a community organizing group called Got Green which promotes the environment and social justice, "The jobs haven't surfaced yet." No kidding.

The good news is that some non-residential buildings have been weatherized - the Washington Athletic Club, which presumably caters to people who can afford to join, and a few hospitals. Nice, but these aren't homes in poor neighborhoods. Howard Greenwich is a director with Puget Sound Sage, an economic justice group. He says "Who's benefiting from this program right now – it doesn't square with what the aspiration was." No kidding.

I pass this along as a cautionary tale. When you hear politicians tout the wonders of green jobs, it might be a good idea to be skeptical. Government inefficiency knows no bounds.

10,000 Cocksure Moralists

Came across a quote attributed to H.L. Mencken, early 20th century journalist who wrote for the Baltimore Sun...

“One man who minds his own business is more valuable to the world than 10,000 cocksure moralists.”

Just so.

Ann Coulter on Britain

Love her or hate her, she does have a way with words.
 

 

THE SUN NEVER SETS ON THE BRITISH WELFARE SYSTEM
August 10, 2011


Those of you following the barbaric rioting in Britain will not have failed to notice that a sizable proportion of the thugs are white, something not often seen in this country.

Not only that, but in a triumph of feminism, a lot of them are girls. Even the "disabled" (according to the British benefits system) seem to have miraculously overcome their infirmities to dash out and steal a few TVs.

Congratulations, Britain! You've barbarized your citizenry, without regard to race, gender or physical handicap!

With a welfare system far more advanced than the United States, the British have achieved the remarkable result of turning entire communities of ancestral British people into tattooed, drunken brutes.

I guess we now have the proof of what conservatives have been saying since forever: Looting is a result of liberal welfare policies. And Britain is in the end stages of the welfare state.

In 2008, a 9-year-old British girl, Shannon Matthews, disappeared on her way home from a school trip. The media leapt on the case -- only to discover that Shannon was one of seven children her mother, Karen, had produced with five different men.

The first of these serial sperm-donors explained: "Karen just goes from one bloke to the next, uses them to have a kid, grabs all the child benefits and moves on."

Poor little Shannon eventually turned up at the home of one of her many step-uncles -- whose ex-wife, by the way, was the mother of six children with three different fathers.

(Is Father's Day celebrated in England? If so, how?)

The Daily Mail (London) traced the family's proud Anglo ancestry of stable families back hundreds of years. The Nazi war machine couldn't break the British, but the modern welfare state has.

A year earlier, in 2007, another product of the new order, Fiona MacKeown, took seven of her eight children (by five different fathers) and her then-boyfriend, on a drug-fueled, six-month vacation to the Indian island of Goa. The trip was paid for -- like everything else in her life -- with government benefits.

(When was the last time you had a free, six-month vacation? I'm drawing a blank, too.)

While in Goa, Fiona took her entourage on a side-trip, leaving her 15-year-old daughter, Scarlett Keeling, in the capable hands of a 25-year-old local whom Scarlett had begun sleeping with, perhaps hoping to get a head-start on her own government benefits. A few weeks later, Scarlett turned up dead, full of drugs, raped and murdered.

Scarlett's estranged stepfather later drank himself to death, while her brother Silas announced on his social networking page: "My name is Si, n I spend most my life either out wit mates get drunk or at partys, playing rugby or going to da beach (pretty s**t really)."

It's a wonder that someone like Silas, who has never worked, and belongs to a family in which no one has ever worked, can afford a cellphone for social networking. No, actually, it's not.

Britain has a far more redistributive welfare system than France, which is why France's crime problem is mostly a matter of Muslim immigrants, not French nationals. Meanwhile, England's welfare state is fast returning the native population to its violent 18th-century highwaymen roots.

Needless to say, Britain leads Europe in the proportion of single mothers and, as a consequence, also leads or co-leads the European Union in violent crime, alcohol and drug abuse, obesity and sexually transmitted diseases.

But liberal elites here and in Britain will blame anything but the welfare state they adore. They drone on about the strict British class system or the lack of jobs or the nation's history of racism.

None of that explains the sad lives of young Shannon Matthews and Scarlett Keeling, with their long English ancestry and perfect Anglo features.

Democrats would be delighted if violent mobs like those in Britain arose here -- perhaps in Wisconsin! That would allow them to introduce yet more government programs staffed by unionized public employees, as happened after the 1992 L.A. riots and the 1960s race riots, following the recommendations of the Kerner Commission.

MSNBC might even do the unthinkable and offer Al Sharpton his own TV show. (Excuse me -- someone's trying to get my attention ... WHAT?)

Inciting violent mobs is the essence of the left's agenda: Promote class warfare, illegitimate children and an utterly debased citizenry.

Like the British riot girls interviewed by the BBC, the Democrats tell us "all of this happened because of the rich people."

We're beginning to see the final result of that idea in Britain. The welfare state creates a society of beasts. Meanwhile, nonjudgmental elites don't dare condemn the animals their programs have created.

Rioters in England are burning century-old family businesses to the ground, stealing from injured children lying on the sidewalks and forcing Britons to strip to their underwear on the street.

I keep reading that it's because they don't have jobs -- which they're obviously anxious to hold. Or someone called them a "kaffir." Or their social services have been reduced. Or their Blackberries made them do it. Or they disapprove of a referee's call in a Manchester United game.

A few well-placed rifle rounds, and the rioting would end in an instant. A more sustained attack on the rampaging mob might save England from itself, finally removing shaved-head, drunken parasites from the benefits rolls that Britain can't find the will to abolish on moral or utilitarian grounds. We can be sure there's no danger of killing off the next Winston Churchill or Edmund Burke in these crowds.

But like Louis XVI, British authorities are paralyzed by their indifference to their own civilization. A half-century of berating themselves for the crime of being British has left them morally defenseless. They see nothing about England worth saving, certainly not worth fighting for -- which is fortunate since most of their cops don't have guns.

This is how civilizations die. It can happen overnight, as it did in Revolutionary France. If Britain of 1939 were composed of the current British population, the entirety of Europe would today be doing the "Heil Hitler" salute and singing the "Horst Wessel Song."

Bush Tax Cuts

I don't normally defend George W. Bush on his economic policies. He spent way too much. But one of the canards that has become an article of faith among democrats needs to be exposed, namely that the Bush tax cuts are mostly (or completely, for some) responsible for the mess we're in now. Nonsense.

Bush inherited an economy that was coming back to earth from the dot-com bubble, resulting in a recession from March-November of 2001. As one would expect after a recession, income tax receipts fell from 2001 to 2002, by about 13%, and fell again in 2003, by about 7.5%. But from 2003, when the tax cuts were fully implemented, to 2007, an interesting thing happened. Income tax receipts rose from about $794 billion to $1.16 trillion. This is an increase of 46%. Income tax revenues fell by only about 1.3% in 2008, at which point the Great Recession hit, leading to decreased federal revenues. Of course, the recession was caused by the implosion of the housing bubble, not the tax cuts.

The obvious conclusion is that Bush's tax cuts did not cause a revenue problem for the government. They certainly did not cause the recession. They spurred economic growth, which led to significantly increased revenues. Bush had a spending problem. Unfortunately, Obama has a much bigger spending problem.

 

At any rate, I pass this along so that the next time you hear some fool blame the Bush tax cuts for our current dilemma, you'll know that he or she is full of it.
 

Source of data: Office of Management and Budget

 

Failed Policies

Following is a pretty concise explanation of why Obama's policies are causing problems with the economy...

Punishing Success: Why Obama's Economy Won't Improve

How We Got to This Point

From the Wall Street Journal. The question is: will we ever learn?


The Road to a Downgrade: A Short History of the Entitlement State

No Easy Answers

Below is an article which explains nicely why we should eschew central planning and the allure of easy answers to economic problems.

 
NOT SO SIMPLE

By Donald Boudreaux
July 27, 2011
   
Harry Truman famously longed for a one-armed economist. Our 33rd president was tired of his economic advisers qualifying their counsel by saying "but on the other hand."

Reality is like that. It's complex. The economy is especially so.

In the U.S. alone, hundreds of millions of consumers daily make choices, often different from the choices made yesterday. Millions of entrepreneurs daily anticipate what consumers want -- and try to outguess each other in the competition to anticipate correctly. Countless investors, business executives, labor-union officials -- just like consumers and entrepreneurs -- attempt to promote their self-interest in a world of innovation, change and, hence, uncertainty.

Mixed in with all these private-sector activities are the actions and reactions of politicians, government administrators, judges and jurors, each of whom -- sometimes individually, more commonly in groups -- can alter the rules that govern private-sector economic activities.

Over the past two-plus centuries, economists have made real progress in the quest to explain economic activity in ways that meet scientific standards and to enhance our understanding of the economy. But this real progress does not mean that economists can make predictions as precise as those made by, say, astronomers.

The zillions of decisions made daily by the billions of people in today's global economy simply cannot be predicted -- and the detailed consequences of these decisions cannot be predicted -- with the kind of precision that we take for granted in many of the natural sciences. So any economist worth his or her salary will qualify any prediction of the future -- and qualify any explanation of the past -- with the recognition that other predictions and explanations also have potential merit.

Economists cannot avoid the large amounts of uncertainty and imprecision that make economics unsatisfying to people, such as Truman, who demand simple and unambiguous answers.

But because there's a large demand -- especially among politicians -- for simple and unambiguous answers, there's no shortage of people willing to supply such answers.

Consider the history of tariffs in America. Protectionists today are fond of pointing out that U.S. tariffs in the 19th century were high by modern standards, and that economic growth during that century was also impressively robust. From these two facts, protectionists dive confidently into the conclusion that America's 19th-century economic growth was promoted by tariffs. These protectionists then assert that if we would raise tariffs to heights not seen in generations, today's economic troubles would be diminished.
Reality, though, allows no such simplistic conclusions.

Nineteenth-century America was full of policies nonexistent -- or much modified -- in 20th- and 21st-century America. For example, women weren't allowed to vote in national elections in the 19th century. Should we therefore conclude that the prohibition on women voting during America's first full century caused the impressive amount of economic growth during that century? Should we disenfranchise women today as a means of reinvigorating the economy?

Although anyone with a decent amount of creativity could concoct a logically coherent "theory" to explain just how the prohibition on women voting led to economic growth, almost everyone would reject that "theory." And rightly so.

The implausibility of economic growth being fueled by keeping women from casting ballots is so great, especially in light of many other things that we know about the 19th-century American economy, that we sensibly reject that "theory" out of hand.

What are some of the other things that we know about the 19th-century U.S. economy? For starters, it was a giant free-trade zone. From Miami to Seattle, from San Diego to Caribou, Maine, men and women traded freely with each other. States -- tempted as governments always are to shield producers within their jurisdictions from competition -- were stopped from engaging in such protectionism by strict application of the Constitution's Commerce Clause.

If free trade discourages economic development, it's difficult to explain the economic growth that took place in the 19th century among the tariffless U.S. states spanning a huge continent. Does anyone believe that Californians and Pennsylvanians would be even richer today had states been allowed to impose tariffs on each others' products?

We know also that, apart from imposing tariffs and handing out some subsidies, Uncle Sam in the 19th century followed a comparatively laissez-faire policy. Now there's a plausible source of economic growth, one that is consistent with the facts -- including the fact that the economy is astonishingly complex.

The more complex the economy, after all, the more we must rely upon localized individual decision-makers and less on centralized, collective plans to keep it going and growing. Such plans, relative to the economy, are always simplistic -- and, hence, dangerously alluring to minds that seek simple answers.

What No One is Talking About

Something everyone should be aware of regarding the ongoing debt ceiling negotiations...

Whatever deal is reached, assuming one is, there will be no spending cuts at all. Doesn't matter whether it's Boehner's plan, or Reid's, or anyone else's. The reason is something called "baseline budgeting". Under this budgeting gimmick, spending increases are built into the system each year. Essentially, spending increases are on auto-pilot. According to the CBO, these automatic increases are estimated to be $9.5 trillion over the next decade.

After some deal is reached, politicians will tell us that they have made significant progress toward getting our fiscal house in order. In reality, all they will have done is reduce the rate of growth of spending. Only in Washington can an increase in spending be called a "cut" with a straight face. The train wreck will only have been postponed.

So, my suggestion is to drink heavily.

Debt Negotiations

Some thoughts on the debt ceiling negotiations...

We are told that if we don't raise the debt ceiling by August 2, we will default on our debt. Why? From what I've read, monthly debt service is about $20 billion. Federal revenues per month are about $200 billion. So, we can certainly service our debt, i.e., not default. That said, we'll have to prioritize spending, and it won't be pleasant, but default? At least in the short term, we'll default only if Obama decides to default.

On our current pace, we will have deficits over the next ten years of approximately $10-15 trillion. We are told that a "big deal" would mean $4 trillion in deficit reduction over ten years. That means we will have an additional $6 to 11 trillion added to the current $14 trillion in debt we currently have. That means we will be Greece. And it won't take ten years to get there.

When the top 5% of income earners pay about 58% of federal income taxes, and approximately the bottom 50% pay none, why do Democrats insist that the wealthy have to start paying their fair share? Aren't they already doing that? Wouldn't "shared sacrifice" mean that at least some of those in the bottom 50% pay some federal income tax?

Why do Democrats assume that if we raise tax rates on the wealthy, we will generate X amount of revenue? Do they not grasp that people change their behavior in response to higher tax rates? Do they not understand that the wealthy are better able than the rest of us to avoid higher taxes? Why don't Democrats understand the concept of dynamic analysis? Why don't they understand that when you punish the wealthy, you also punish those who aren't wealthy (see luxury tax, 1990)? Why can't they see that the pursuit of "fairness" ends up hurting those they claim to champion? Why are they so blinded by their hatred of the wealthy? Why don't they recognize that lower rates on the wealthy not only increase revenues to the government, but also increase the proportion of revenues paid by the wealthy? I realize this is counter-intuitive, but see Coolidge, Kennedy, Reagan, and Bush II. I see where some Democrats are floating the idea of a return to an upper marginal rate of 70%. It is difficult to describe how stupid that would be.

Why do we hear so much about tax "loopholes"? Loosely speaking, a loophole is something which allows someone to evade the spirit of the law. But when oil companies deduct business expenses as permitted by the tax code, just as other companies are allowed to do, we are told that they are taking advantage of a "loophole". No, they are not. They are abiding by the tax code, which Congress has put in place. If we want to change the tax code and disallow these "loopholes", let's not be shocked when oil companies scale back their efforts to find more oil, or pass along their higher costs of doing business to us. Couching provisions of the tax code in terms of being "loopholes" is a deliberate attempt to stir up populist anger. Sadly, it's effective.

Obama tells us that if a deal isn't reached by August 2, social security checks may not go out. There may not be enough money "in the coffers". But what about the Social Security Trust Fund? We've been told by progressives that social security is solvent till 2036. Progressives have ridiculed those who say there is nothing in the trust fund but government IOU's because government has already spent that money. If progressives are correct, we should be able to simply tap the trust fund to keep social security checks flowing. Right? For all the carping by politicians about the excesses of the free market, if those in the private sector did what politicians do, they'd be in jail.

I hear progressives criticizing Republicans for their unwillingness to compromise with Obama. After all, they say, Obama is willing to cut spending and even put entitlements on the table. What could be more reasonable? But while Obama wants tax increases quickly, spending cuts would be put off to the "out years", i.e., sometime down the road. We have seen this gambit before. Both Reagan and Bush the elder fell for it. They trusted that democrats would honor future promises of spending cuts, which of course never happened. Why should Republicans today believe such promises? And does anyone know what Obama's plan is? I suspect not, since he has offered no specifics. He also knows that as long as Democrats control the Senate, he can throw out entitlement reform with no worries that it will actually happen. He wants to pretend to be the reasonable adult in the room while offering nothing of substance.

Obama says we don't need a Balanced Budget Amendment, that politicians just have to "do their job". Does anyone trust politicians to do their job? Wouldn't it be preferable to try to prevent politicians from doing the "job" they've been doing for decades and which they are apparently hard wired to do, namely, screw the public? It would take a while for a BBA to get passed, assuming it could, so it won't help in the short term. But long term, I'd like to see some mechanism in place to make politicians "do their job", rather than trusting when they say "I'll respect you in the morning."

Revenues vs. Fairness

The video below is a flashback from a debate between Obama and Hillary. Obama is asked why he wants to raise capital gains tax rates when the data show that lower rates produce more revenue to the government (because people are more likely to sell an asset if the tax bite is lower). He says it's not about revenue, it's about fairness. Then he goes on to talk about needing more revenue to do the things government needs to do, and how he will not run up the debt that George Bush did. Sadly, he's technically correct on that last point, since he's already blown by Bush on accumulating debt.

I am posting this not just as evidence of his Marxist tendencies. If you listen to his words, it's easy to see that he doesn't have a clue what he's talking about. His approach then, and now, is to give long-winded, meandering responses which are apparently designed to challenge the attention span of his audience, who are then supposed to conclude that what he said must be really smart.

Obama Says Raising Taxes Not About Revenue, But About Fairness

History of Homosexuality 101

Governor Jerry Brown signed a bill today making CA the first state to mandate the teaching of gay history in the public schools.

I think this is an excellent idea. We don't want American kids to fall behind kids throughout the world in learning that the first recorded case of a guy sucking a dick was an ancient Babylonian named Blowjobus Maximus. And of course no education is complete without knowing that lesbians in the ancient world were known as Papyrus Munchers. Or that the struggle between Robert E. Lee and Ulysses S. Grant was actually motivated by a latent desire for each other and a dispute over who would be pitching or catching.

The end of Western Civilization draws nigh.

Here We Go Again

History repeating itself?  First, banks are accused of discrimination against minorities in their lending practices. Then, the government forces banks to lower their lending standards so more minorities can buy a house. A real estate bubble ensues. The bubble bursts when, quite predictably, many of these loans default. Then banks are accused of predatory lending for doing what the government told them to do. Banks return to sounder credit standards. These standards mean that fewer minorities get loans. The government then goes after banks for discriminatory lending practices.

One could almost forgive government folks not knowing the economic lessons of, say, the Coolidge administration. But we haven't even dug out of the mess that this kind of intervention created the last time it was tried.

DOJ Begins Bank Witch Hunt

The Importance of Knowing Our History

“I think we ought to go back to the people and the party that was the only party and the only people to balance the budget in 40 years. I hate to break it to my Republican friends, but that is the Democratic Party. We are the ones who did it. We did it when Bill Clinton came into office. We did it after hard work. We did it after painful cuts. We did it with smart investments.” — Sen. Barbara Boxer (D-Calif.), June 29, 2011

Of course, as anyone familiar with recent history knows, Boxer's comments are uttter hogwash. But don't take my word for it. The Washington Post Fact Checker says "it is a rewriting of history that borders on the absurd."

Barbara Boxer's Blatant Rewriting of History

Racial Preferences in Michigan

The 6th U.S.Circuit Court of Appeals has ruled against a ban on affirmative action which was passed by Michigan voters.

It would appear that "equal protection under the law" is a concept which continues to elude many jurists.

A Horrible Racial Preference Ruling in Michigan

Green Energy

The reality of green energy is often at odds with the political rhetoric. To the extent that the ideology of central planners ignores the wisdom of the market, people will continue to suffer.

From a recent column in the U.K. Telegraph...

In the week when it was reported that 20 percent of the EU's fast-soaring, trillion-euro [US $1.4 Trillion] budget may soon be spent on "fighting climate change", it was timely that Britain's energy companies should have met with the Department of Energy and Climate Change to raise one of the best-hidden secrets of our Government's obsession with wind power.

Centrica and other energy companies last week told DECC that if Britain is to spend 100 Billion Pounds [US $162 Billion] on building thousands of wind turbines, it will require the building of 17 new gas-fired power stations simply to provide back-up for all those times when the wind drops and the windmills produce even less power than usual.

We will thus be landed in the ludicrous position of having to spend an additional 10 Billion Pounds [US $16.2 Billion] on those 17 dedicated power stations, which will be kept on "spinning reserve" 24 hours a day, just to make up for the fundamental problem of wind turbines. This is that their power continually fluctuates between full capacity to zero (where it stood last winter, when national electricity demand was at a peak).   [Many people, particularly in Scotland were without power for many days in the depth of one of worst winters in history]

Two things make this even more absurd.  One, as the electric companies pointed out to DECC , is that it will be amazingly costly and wildly uneconomical, since the dedicated power plants will often have to run at a low rate of efficiency, burning gas but not producing electricity.  This will add billions more to our fuel bills for no practical purpose.  The other absurdity, as recently detailed studies have confirmed, is that gas-fired power stations running on "spinning reserve" chuck out much more CO2 than when they are running at full efficiency-thus negating any savings in CO2 emissions supposedly achieved by the windmills themselves.

The policy on which our national energy strategy is now centered is a ludicrously expensive, self-defeating joke, which will achieve no benefits whatsoever -- even if you are among the diminishing number of people who still believe that man-made CO2 is causing catastrophic climate change.

More on Tax Breaks

During Wednesday's press conference, Obama repeatedly (at least six times) mentioned fat cats who get tax breaks on their corporate jets, saying that these kinds of tax loopholes should be scrapped. This is the kind of rhetoric that appeals to those who love class warfare. After all, who cares about rich guys who get to fly in corporate jets? Shouldn't they be paying their fair share?

Obama apparently forgot that the tax breaks he constantly berated were created by his own "stimulus" package. Oops.

The tax breaks allow for accelerated depreciation, which let companies take a larger tax deduction in the early years of the life of an asset, such as a plane. This obviously makes the purchase of a jet more attractive to companies. The incentive was first used after 9/11 to help plane manufacturers cope with lost sales as a result of the terrorist attacks. With the recession, the aviation industry again experienced a slump in business and had to cut jobs as a result. Cessna and Hawker Beechcraft, based in Wichita, KS, lost almost 7,000 jobs. So, Congress approved the tax break in the stimulus, signed by Obama.

There should be a lesson here for Obama, beyond the need to remember what he signed into law. You can't soak the rich without affecting those who aren't rich. Go ahead and revoke the tax break on corporate jets. A lot of people will applaud that the rich are getting what they deserve. Tell that to the people who then lose their jobs in the aviation industry as a result of declining sales.

This is the same lesson that should have been learned from the 1990 luxury tax, but some people refuse to learn it. Or, maybe Obama knows better, but the temptation to wage class warfare is simply too great to pass up. Facile but foolish appeals to the notion of fairness evidently trump reality.

Obama on Taxes

A few thoughts on Obama's press conference yesterday...

He continues to insist that the "rich" must have their taxes increased. By rich, he means those making over $250,000 per year, but he usually refers to "millionaires and billionaires" in an effort to stir up class warfare. It's much easier to get people riled up about Wall Street "fat cats" than small business owners who create most of the jobs in America. He doesn't seem to grasp that 1) the rich already pay the lion's share of taxes (while the lower 50% of earners pay almost nothing), 2) the rich are those who employ people, invest, and spend, all of which are necessary for a growing economy, and 3) the rich will alter their behavior in the face of higher taxes.

For anyone skeptical of the third claim, I offer as evidence the luxury tax that was enacted in 1990 on various toys of the wealthy, including yachts, airplanes and jewelry. The Joint Committee on Taxation estimated that revenues from the luxury tax in 1991 would be $31 million. It turned out to be about $16 million. Why? Wealthy folks changed their behavior in response to the new tax.

An excerpt from a George Will article in 1999: "According to a study done for the Joint Economic Committee, the tax destroyed 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry. The job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. So the net effect of the taxes was a loss of $7.6 million in fiscal 1991, which means the government projection was off by $38.6 million." In other words, the luxury tax was only a minor nuisance to the wealthy, but a lot of middle class people got hurt by the attempt to stick it to the rich.

Incredibly, government agencies still use the static analysis which led to such lousy predictions 20 years ago.

He repeated the canard that oil companies need to have their "subsidies" ended. But, there is no such thing as a subsidy for oil companies.  (See my post on May 6 below).  I cannot really blame Obama for continuing to repeat this lie. He is, after all, a politician trying to get reelected. The blame lies with the public, too many of whom can't be bothered to do their homework.

Obama laid the blame for our debt problems not only on Republicans, but Congress in general, saying that they "ran up this bill." Well, Congress deserves a lot of blame, but Obama essentially absolved himself of any responsibility. He basically said "Hey, don't blame me for this mess! Congress did it!" I've never taken a course in leadership, but I'm pretty sure that passing the buck is not one of the lessons.

Obama is, by all accounts, a very smart guy. Why then is virtually every economic policy he pursues precisely the opposite of what should be done? Is he actually not that smart? Or does ideology override his intellect?

The Ice Man Cometh?

The Little Ice Age (LIA) occurred from roughly 1300 to 1850. The coldest part of the LIA, from 1645 to 1715, was also a period of very low sunspot activity, known as the Maunder Minimum.

I bring this up because three independent studies were released yesterday, each predicting that in the next solar cycle, beginning sometime in 2013, sunspot activity "may be going into hibernation", as put by a spokesman for the National Solar Observatory. Sunspot activity is predicted to be at its lowest level since the Maunder Minimum.

Some scientists are openly wondering whether this phenomenon could hint at the coming of another LIA. Others say not so fast, increasing levels of CO2 could offset any cooling that may occur. But from what I've read, they are all paying very close attention to what is going on with the sun. As National Geographic put it: "A prolonged lull in solar activity has astrophysicists glued to their telescopes waiting to see what the sun will do next—and how Earth's climate might respond." Wow. Sounds like they're concerned. Maybe the climate is going to do whatever it does regardless of what mankind does.

So, is the world going to end in fire or ice? Beats me. And apparently it has a lot of scientists baffled. But starting today, I'm going to do every thing I can to increase my carbon footprint and my methane footprint. Golf balls go farther on hot days than on cold ones.

Minimum Wage and the War on Poverty

The link below is worth a look. Walter Williams discusses how it could be that America has spent trillions to help the poor since Lyndon Johnson declared a "War on Poverty" in the 1960's, yet poverty rates are about the same today. He also talks about the debilitating effects of minimum wage laws. It is astounding that a very high percentage of Americans support minimum wage laws.  People cling to that belief no matter how much data to the contrary confronts them.

Walter Williams and the War on Poverty 
 

Moats & Alligators

Warning:  Those of you who cannot tolerate any criticism of Obama should not read the following article by Charles Krauthammer.  While it is spot on, Obamaphiles will suffer discomfort.

 Demagoguery 101

Gas Prices

When gas prices soared under Bush, it was awful. Now that prices are soaring under Obama, well, you know, it's actually not such a bad thing. Hell, we can even laugh about it.

Gas Price Hypocrisy

Oil Subsidies

We hear more and more about the need to end subsidies to oil companies. Not just from Obama and democrats, but from some republicans and conservative pundits. Increasingly, the conventional wisdom seems to be that we ought to get rid of these subsidies.

I found myself wondering recently just what these subsidies are.  Are they actual subsidies, i.e., direct money payments from the government? Or are they tax breaks?  If they are tax breaks, are they special breaks that only oil companies get?  Would ending these breaks help lower the price of a gallon of gas?  Do those who advocate the end of subsidies to Big Oil even know what they're talking about?

I think this article provides some clarification:

About Those Oil Company Subsidies

Who Needs 27 Billion Barrels of Oil?

Further evidence, if any was needed, that the EPA is basically a bunch of lunatics who are conspiring, with malice aforethought, to ruin the country...

EPA Rules Force Shell to Abandon Drilling Plans

Freedom

Americans are less free than we once were.

According to the Competitive Enterprise Institute...

The tax code is now 72,536 pages long. And...

• Federal regulations cost $1.75 trillion per year in compliance costs (according to the Small Business Administration). That’s equivalent to about half of federal spending. Government’s cost is actually about 50 percent bigger than most people think.
• Agencies issued 3,752 final rules in 2010. At that pace, a new rule comes into effect every two hours or so.
• Another 4,225 rules are in the pipeline right now.
• The Federal Register hit an all-time high 81,405 pages in 2010.
• Economically significant regulations are way up. These are defined as rules that have over $100 million of economic impact. There were 224 in 2010. That’s a 22 percent increase over 2009′s 184.

Certainly, regulations in a country of 300+ million are necessary.  But I don't think you have to be skeptical of government efficiency (as I am) to believe that lots of regulations are unnecessary and would not pass any kind of cost-benefit analysis.

Last week, Rep. Ed Whitfield (R-KY) asked an EPA official for an example of a regulation being rejected because the costs outweighed the benefits. The official couldn't come up with an answer.

I seriously doubt whether the EPA pays any attention to the costs of the regulations it promulgates. I would argue that the regulatory agencies of the executive branch are less interested in promoting regulations that pass cost-benefit muster than they are about shaping society in accordance with their visions of how it ought to be.

It's worth noting that their is little, if any, Congressional oversight of these regulations--which is understandable, I suppose, given the sheer volume of them. The end result is that Americans are so heavily regulated that it requires think tanks to sort through the morass, because we certainly can't.

And, whether necessary or not, the more we are regulated, and the more those regulations cost, the less free we are. Because the relationship between government power and personal liberty is zero-sum. Always has been. Always will be.

S & P Rating

To those of you who have money in the stock market, I hope you have the means to get out quickly...

Enron Writ Large

Accountability

I would like to see some member of Congress propose the following bill:

Members of Congress and the Executive Branch shall be held to the same legal and ethical standards that apply to financial officials in the private sector.

That's it. A one-sentence bill.

Uncle Sam's Cooked Books

Budget Compromise

Charles Krauthammer offers a persuasive argument...

The Grand Compromise

Mandatory Entitlements

In 1993, the Clinton administration promulgated rules which said that seniors who withdraw from Medicare Part A (which covers hospital and outpatient services) must forfeit their Social Security benefits.

In 2008, a group of senior citizens sued the government, saying they should be allowed to opt out of Medicare without losing their Social Security benefits. The plaintiffs paid Medicare taxes during their working lives, and they were not trying to get that money back. They just wanted to be able to pay for medical care from their own private savings without losing Social Security benefits. In other words, they wanted to be able to pay for medical care they considered to be superior to that offered by Medicare, without being penalized for that choice.

In the fall of 2009, federal judge Rosemary Collyer supported the plaintiffs. She rejected the Obama Administration's argument that the plaintiffs had suffered no "injury" and lacked standing. She also denied the Administration's request to dismiss the suit, saying that "neither the statute nor the regulation specifies that Plaintiffs must withdraw from Social Security and repay retirement benefits in order to withdraw from Medicare." You read that last part right. The government argued that in order to withdraw from Medicare, you must not only lose your Social Security, but you must repay any retirement benefits you may have received to that point.

Incredibly, last week Judge Collyer reversed herself and dismissed the case. She decided that the Medicare statute does indeed require that Social Security recipients take government health care. According to the judge's newly discovered logic, you are no longer simply "entitled" to Medicare if you are "entitled" to Social Security (as the Medicare statute says), you must accept Medicare if you accept Social Security. In Collyer's current view, if you are entitled to something, you must accept it, or be penalized.

It is difficult to find the words to describe how insane this is. One might think that the government would be thrilled to have some seniors opt out of Medicare, since Medicare is currently a high speed fiscal train wreck that can't be stopped without major changes.

Why, then, would the government insist that seniors must participate in Medicare against their will? Here's a possible answer: the government is less interested in saving money and offering choice to consumers than in herding everyone into the same government health care pen, all in the pursuit of their egalitarian utopia.

I recently offered the opinion that we are less free than we once were. I would like to thank the government for proving my point.

Offshore Drilling is Great -- Just Not Here

Obama has come out strongly in favor of off-shore drilling for oil...in Brazil.

During his trip to South America, he told a group of Brazilian businessmen:

“We want to help you with the technology and support to develop these oil reserves safely. And when you’re ready to start selling, we want to be one of your best customers. At a time when we’ve been reminded how easily instability in other parts of the world can affect the price of oil, the United States could not be happier with the potential for a new, stable source of energy.”

As Rep. Doc Hastings (R-WA), chairman of the House Natural Resources Committee, put it:

“Rather than creating American energy and American jobs, President Obama is in Brazil advocating for deepening the United States’ reliance on foreign energy."

“The President has clearly learned nothing from recent world events.  He appears to believe the answer is to shift our foreign energy dependence from one part of the world to another.  The real answer is to produce more American energy.  The ‘potential for a new, stable source of energy’ can be found with our own resources here at home.  Resources that the Obama Administration is purposely choosing to keep under lock-and-key.”

Just so. If only Obama were as concerned about American jobs and economic growth as he apparently is about Brazil's. A cynic might begin to think that he views this as an opportunity to redistribute wealth.

Conditioning for Dhimmitude

The following article by Janet Levy on the American Thinker makes an interesting argument, namely that the West has already succumbed, at least psychologically, to the de facto imposition of Islamic law. The desecration of a Christian symbol such as a crucifix in a jar of urine is not only tolerated, but celebrated by some as art, and taxpayer funded art to boot. But a book published by Yale University Press on the Danish cartoons of Mohammed that sparked Muslim violence contains no illustrations of those cartoons, for fear that they would spark more violence. Her argument supports my belief that Muslims have learned to use our own notions of political correctness against us. Islam enjoys a protected status in America that no other religion can claim.


 Conditioning for Dhimmitude

Atlas Shrugged Motors

Did y'all know that taxpayers will be paying GE $375,000,000 to buy cars that the private sector is rejecting? Central planning and crony capitalism combine to make Ayn Rand's cautionary tale a lesson we have yet to learn.


Chevy Volt: The Car from Atlas Shrugged Motors

by Patrick Michaels


The Chevrolet Volt is beginning to look like it was manufactured by Atlas Shrugged Motors, where the government mandates everything politically correct, rewards its cronies and produces junk steel.

This is the car that subsidies built. General Motors lobbied for a $7,500 tax refund for all buyers, under the shaky (if not false) promise that it was producing the first all-electric mass-production vehicle.

At least that's what we were once told. Sitting in a Volt that would not start at the 2010 Detroit Auto Show, a GM engineer swore to me that the internal combustion engine in the machine only served as a generator, kicking in when the overnight-charged lithium-ion batteries began to run down. GM has continually revised downward its estimates of how far the machine would go before the gas engine fired, and now says 25 to 50 miles.

It turns out that the premium-fuel fired engine does drive the wheels--when the battery is very low or when the vehicle is at most freeway speeds. So the Volt really isn't a pure electric car after all. I'm sure that the people who designed the car knew how it ran, and so did their managers.

Why then the need to keep this so quiet? It's doubtful that GM would have gotten such a subsidy if it had been revealed that the car would do much of its freeway cruising with a gas engine powering the wheels. While the Volt is more complicated than the Prius, and has a longer battery-only range, a hybrid is a hybrid, and the Prius no longer qualifies for a tax credit.

In other words, GM was desperate for customers for what they perceived would be an unpopular vehicle before one even hit the road. It had hoped to lure more if buyers subtracted the $7,500 from the $41,000 sticker price. Instead, as Consumer Reports found out, the car was very pricey. The version they tested cost $43,700 plus a $5,000 dealer markup ("Don't worry," I can hear the salesperson saying, "you'll get more than that back in your tax credit!"), or a whopping $48,700 minus the credit.

This is one reason that Volt sales are anemic: 326 in December, 321 in January, and 281 in February. GM announced a production run of 100,000 in the first two years. Who is going to buy all these cars?

Another reason they aren't exactly flying off the lots is because, well, they have some problems. In a telling attempt to preserve battery power, the heater is exceedingly weak. Consumer Reports averaged a paltry 25 miles of electric-only running, in part because it was testing in cold Connecticut. (My engineer at the Auto Show said cold weather would have little effect.)

It will be interesting to see what the range is on a hot, traffic-jammed summer day, when the air conditioner will really tax the batteries. When the gas engine came on, Consumer Reports got about 30 miles to the gallon of premium fuel; which, in terms of additional cost of high-test gas, drives the effective mileage closer to 27 mpg. A conventional Honda Accord, which seats 5 (instead of the Volt's 4), gets 34 mpg on the highway, and costs less than half of what CR paid, even with the tax break.

Recently, President Obama selected General Electric CEO Jeffrey Immelt to chair his Economic Advisory Board. GE is awash in windmills waiting to be subsidized so they can provide unreliable, expensive power.

Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced. Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375,000,000 to a company to buy cars that no one else wants so that GM will not tank and produce even more cars that no one wants. And this guy is the chair of Obama's Economic Advisory Board?

It really is enough to get you to say Atlas Shrugged. For those who do not know, or who are only vaguely familiar with, the Ayn Rand classic, it is a story of a society in decay, where politically favored technologies and jobs are foisted on the nation, where innovations that might threaten existing corporatist cartels are financially or physically sabotaged as unemployment mounts and the nation spirals into a malaise that makes the Carter years look like Mr. Rogers' Neighborhood.

Atlas Shrugged is about to come out as a surprisingly good and entertaining movie (which will be destroyed by Hollywood and New York Critics) on--you guessed it--April 15. Maybe the government could put in an ad before the show with Immelt exhorting Americans to care about "the environment and green jobs." All must buy Volts.

Patrick Michaels is senior fellow in environmental studies at the Cato Institute and author of Climate Coup: Global Warming's Invasion of our Government and our Lives, which comes out April 22.

Lying About Social Security

A few weeks ago Jack Lew, director of the Office of Management and Budget (OMB) wrote in USA Today that social security is solvent until 2037. Therefore, the narrative goes, there is no need to even consider social security in current budget negotiations. I have since heard the same claim made by several journalists and pundits on the left.

Lew was also OMB director in the last couple of years of the Clinton administration. Back then, he sang a different tune. When discussing the fiscal 2000 budget, then-director Lew said that social security trust fund balances were nothing more than a "bookkeeping" device. He said “They do not consist of real economic assets that can be drawn down in the future to fund benefits.” Then, he was telling the truth. There was, and is, nothing in the "trust fund" but a government IOU that can only be redeemed by taxing or borrowing. Contrary to the tale being spun by the left, social security is already a drain on budgets. As baby boomers start retiring, the burden will quickly become severe. And Lew damn well knows it.

Why, then, is Lew lying through his teeth now? Do they actually want the economy to implode?

The Myth of Green Energy Jobs

In a recent article by Kenneth Green at the American Enterprise Institute, he discusses the failure of the European experiment in "green jobs", and its implications for Obama's attempts to create them. The article is lengthy, so I offer the conclusion below for those who don't wish to wade through it. Note: his comment about "breaking windows" is a reference to French economist Frederic Bastiat's fallacy of the broken window, which is explained in the article.


Conclusion
Both economic theory and the experience of European countries that have attempted to build a green-energy economy that will create green jobs reveal that such thinking is deeply fallacious. Spain, Italy, Germany, and Denmark have all tried and failed to accomplish positive outcomes with renewable energy. Some will suggest that the United States is different, and that US planners will have the wisdom to make the green economy work here. But there is no getting around the fact that you do not improve your economy or create jobs by breaking windows, and US planners are no more omniscient than those in Europe.

The Myth of Green Energy Jobs: The European Experience

The Brits and the U.N.

According to an item in the news...

The British are pulling funds from U.N. agencies deemed to be wasteful and inept. Britain's Department for International Development (DFID) issued a review of funding to the U.N. It placed two agencies on notice, saying they must improve immediately or lose their funding. Four other U.N. agencies fared worse. The UN Human Settlements Programme (UN-HABITAT), the International Labour Organization (ILO), the UN Industrial Development Organization (UNIDO), and the UN International Strategy for Disaster Risk Reduction (UNISDR) had their funding withdrawn completely. All other U.N. agencies were harshly criticized.

I think it's time the U.S. conducted a study of what exactly the U.N. does and how it does it. We might just find that the Brits are on to something.

Saw a pretty good line in an article this morning....

"No matter how cynical I get, I just can't keep up."

Rousseau, Islamists, & the Left

Below is an article by Andrew McCarthy at National Review. It examines the connections between jihadists and the left, with Rousseau as a major link. Quite thought provoking...

 

Jean-Jacques Jihad

March 5, 2011

 

The one thing that absolutely could not be tolerated was true freedom, the liberty of the individual. For Jean-Jacques Rousseau, the “social compact” would otherwise be “an empty formula.” The irreducible core of the utopia he envisioned, the “undertaking which alone can give force to the rest,” was quite simply this: “Whoever refuses to obey the general will shall be compelled to do so by the whole body.” 

Ah, yes, the “general will.” For this, every modern totalitarian movement is indebted to the 18th-century Genevan philosopher who claimed, in The Social Contract, that a man’s compulsory servitude to the state — the embodiment of this general will — “means nothing less than that he will be forced to be free.” Rousseau was what we today call “Orwellian” long before there was an Orwell. “Freedom” was nothing more than submission.

That is why Rousseau so admired Islam.

The history of Islam and the modern Left is one of cooperation when there is some obstacle to their divergent concepts of “social justice” and the perfect society. These are always marriages of convenience, enduring no longer than the enemy that drives them into each other’s arms. But, reliably, it is they — the Islamists and the leftists — who come together when there is a third party in the mix. Rarely will one collude with a common enemy against the other. Today, the common enemy of Islamists and leftists is individual liberty, especially the social, economic, and political freedom guaranteed by the American Constitution, as conceived by the Framers. Conceived, that is, by men who saw government as a necessary evil to be rigorously limited lest it devour true freedom — not as an essential good to be empowered for the very purpose of enforcing servitude.


Collaborations between Islamists and leftists — past examples and those happening right before our eyes — are numerous, so much so that I admit to being dumbfounded by the frequency of the question of whether they really happen. That there is collusion is undeniable.

That collusion is a major theme of my book The Grand Jihad: How Islam and the Left Sabotage America — “grand jihad” and “sabotage” being the Islamists’ own terms for what they describe as their plan to “destroy Western civilization.” By the time the book was published last spring, the Center for Constitutional Rights, a New Left flagship created by radical lawyer William Kunstler in the 1960s, had spent nearly a decade spearheading the representation of jihadists captured making war against the United States. The Muslim Public Affairs Council (MPAC) — whose founders were ardent admirers of Hezbollah and the Muslim Brotherhood, and whose current executive director said, right after the 9/11 attacks, that “we should put the State of Israel on the suspect list” — was at the forefront of Islamist organizations then campaigning for the enactment of Obamacare, when MPAC wasn’t otherwise occupied by the numerous executive-branch agencies that regularly seek its input on any number of issues.

This should have been no surprise, for history is littered with Islamist/leftist confederations — e.g., the Muslim Brotherhood’s support of the military coup led by Soviet puppet Gamal Abdel Nasser to overthrow the British-backed Egyptian monarchy; the avowed “Islamic socialism” of the Pakistan People’s Party; the blend of Islamists and leftists that has always composed the Palestine Liberation Organization. Let’s say that this hadn’t been the case, though. Let’s pretend that the last 30 years hadn’t seen everything from Iranian Communists rallying to support Khomeini’s revolution to last summer’s “peace flotilla,” a joint effort by Islamist operatives and avowed Communists such as Bill Ayers to break Israel’s blockade of Hamas-controlled Gaza. The everyday cooperation between Islamists and leftists right under our noses would still be manifest.

The interesting question is not whether it occurs, but why. To anyone who studies the matter, as the liberty-loving Muslim reformer Zuhdi Jasser has, the Islamist enthusiasm for statist schemes like Obamacare is easy to decode. Islamist organizations are collectivist groups, Dr. Jasser explains. They fall squarely in line with the socialist platform of the Muslim Brotherhood, which is, as Dr. Jasser puts it, to “increase the power of government through entitlement programs, increased taxation, and restricting free markets whenever and wherever possible.” That platform is the legacy of Brotherhood founder Hassan al-Banna and of Sayyid Qutb, the Brotherhood’s most formidable theoretician. Decades after their deaths, both these men remain required reading for budding Islamist activists in Brotherhood-inspired redoubts like the Muslim Student Association, the Islamic Society of North America, and the International Institute of Islamic Thought.

An animating goal of these organizations is to have Islamic principles recognized by government and enforced through the state’s coercive power. These principles needn’t be known as “Islamic” any more than leftist pieties are advertised as “leftist.” They need only reflect what Islamists, like leftists, call “social justice.”

This is perhaps most clearly illustrated in Qutb’s tract, Social Justice in Islam. The book teaches that Islam is about the collective, and that those who resist the Muslim ummah must, as Rousseau would have said, be “forced to be free.” According to Qutb, “integrating” humanity in “an essential unity” under sharia is “a prerequisite for true and complete human life, even justifying the use of force against those who deviate from it, so that those who wander from the true path may be brought back to it.” The overarching principle is the “interdependence and solidarity of mankind,” with the individual’s well-being achieved by his submission to the Islamic state. And “whoever has lost sight of this principle must be brought back to it by any means.” Thus, Qutb elaborates, sharia makes “unbelief” a “crime” that is “reckoned as equal in punishment” to the “crime of murder.” Forms of treason such as apostasy and fomenting discord in the ummah are capital offenses. As in all totalitarian systems, freedom is an illusion: security through enslavement

Thus is Islam virulently opposed to capitalism, true freedom’s economic form. Qutb expounds on Islamic economic tenets: Human life is demeaned by great agglomerations of personal wealth and by the enrichment financiers attain by collecting interest on loans (which sharia forbids). These arrangements are said to enslave debtors and the working classes, making men the gods of other men. To be sure, Islam endorses private property — nominally — and it is less indifferent than the Left about incentivizing human achievement. But this is only because individual achievement is ultimately a corporate asset, increasing the dominance of the ummah. The property “owner” is merely a custodian; his wealth belongs to Allah. It is subject to confiscation by Allah’s agent on earth, the Islamic state, for what is deemed to be the collective good of the Muslim Nation.

This is Islam’s version of the general will: sharia’s enforcement of the central conceit that there is no God but Allah. Freedom, for Qutb, was a release from the servitude of men to men. Not, however, a release from all servitude. Freedom was “submission” to Allah — and not just spiritual submission, but total submission. Authority in Islam is unitary and indivisible. It recognizes no distinctions between the sacred and the secular. Sharia is not simply a set of spiritual principles. Islam is a comprehensive political, economic, social, and military program with its own legal code, governing every aspect of life.

There can be no compartmentalizing or narrowing. To narrow the breadth of sharia — as Qutb put it, “to confine Islam to the emotions and ritual cycles, and to bar it from participating in the activity of life, and to check its complete dominance over every human secular activity” — would reduce it to something other than the divine law. It would no longer be Islam. Therefore, mankind is not at liberty to constrict Allah’s law, much less to enact provisions that contradict it. Legislatures in the Islamic state are not democratic in the Western sense, even if they have been elected by the community. In a sharia state, as Brotherhood guide Sheikh Yusuf Qaradawi has observed, legislators don’t really legislate; they are merely vessels of the divine law, which has substantially been set in stone for more than a millennium.

In Islam, it is Allah’s sharia that fills the role of Rousseau’s general will. Thus did Qutb observe of Rousseau’s great upheaval, the French Revolution, that what it “theoretically established by human laws . . . was established as a matter of practice by Islam in a profound and elevated form more than fourteen centuries earlier.”

Such symmetry had not been lost on Rousseau, for whom statism would be the “religion of the citizen.” Above all, it would merge the sacred and the secular under a single authority. As in the pagan states of antiquity, Rousseau’s vision of the ideal regime included

its gods, its own tutelary patrons; it has its dogmas, its rites, and its external cult prescribed by law; outside the single nation that follows it, all the world is in its sight infidel, foreign and barbarous; the duties and rights of man extend for it only as far as its own altars.

The similarity to Qutb’s Islam is striking. For the Islamist, all the world is divided into irreconcilable spheres: the perfect social justice of Dar al-Islam, the realm of the Muslims, and the unenlightened darkness so tellingly called Dar al-Harb, “the realm of war” — infidel, foreign, and barbarous.

Small wonder, then, that Rousseau lavished praise on Islam. But not just any Islam; his accolades were reserved for the early Muslims, Islam’s first generations. “Mahomet held very sane views,” Rousseau opined in The Social Contract. The prophet “linked his political system well together,” the civil and the spiritual as one. “As long as the form of his government continued under the caliphs who succeeded him, that government was indeed one, and so far good.” It was only when “the Arabs” departed from this model — when, “having grown prosperous, lettered, civilised, slack and cowardly,” they were “conquered by barbarians” — that Islam fell victim to what Rousseau (and Qutb) saw as the Christian dystopia: “the division between the two powers” of religion and the state.

The Muslim Brotherhood, it bears remembering, preaches a Salafist ideology: a retrenchment to the principles of the salafia, the “rightly guided caliphs” who were Mohammed’s immediate successors. The reform of Islam urged by Banna and Qutb was a purge of the same barbaric influences — particularly Western, Judeo-Christian influences — that Rousseau had seen as so corrupting.

Islamists and leftists have several significant differences. Qutb saw communism as far preferable to capitalism but too obsessed with an economic determinism that discounted the spiritual. The two camps part company on the equality of women and of non-Muslims, on matters of sexual liberty, and on abortion. If the world were populated only by Islamists and leftists, they could not coexist. Their marriages of convenience can have savagely unhappy endings once the common enemy that has drawn them together has been overcome. In Egypt, the Islamists were brutally persecuted by Nasser; in Iran, the secular leftists were routed by Khomeini.

Nevertheless, for all their differences, what unites Islamists and leftists is stronger than what presently divides them. They both support totalitarian systems. They would both attempt to recreate mankind, intending to perfect us by indenturing us to their utopian schemes. Their general will cannot abide free will. They both abhor individual liberty, unfettered reason, freedom of conscience, equality of opportunity rather than result, and bourgeois values that inculcate a devotion to bedrock Western principles and traditions.
That is why Islamists and leftists work together. It is why they will continue working together as long as there is resistance.

—  Andrew C. McCarthy, a senior fellow at the National Review Institute, is the author, most recently, of The Grand Jihad: How Islam and the Left Sabotage America.