Thursday, May 26, 2011

For Democrats, It's All About Tax Hikes

If nothing else, last week made it abundantly clear where Democrats stand on today's most pressing issues, and the picture isn't pretty.

In case you missed it, the Democrats floated a plan for a millionaire surtax in an attempt to, as the Hill put it, "force Republicans to accept other tax increases." They tried to hike taxes on oil companies by more than $2 billion a year, because the industry is currently making big profits; and mounted a nationwide campaign to scare seniors away from Rep. Paul Ryan's Medicare reform — including a new ad that depicts Ryan tossing a senior citizen off a cliff.

Detect a theme there? On issue after issue, Republicans are putting forward serious, sober and often politically risky solutions to the nation's most pressing problems, while Democrats play class-warfare games and stoke the public's fear.

To cope with the nation's gargantuan debt, for example, the GOP issued a budget plan that focuses — correctly — on reining in the government's runaway spending. The only thing Democrats want to talk about is how all our problems can be solved if we just raise taxes on the "the rich."

President Obama wants to boost them by at least $1 trillion, and Senate Democrats promise their long-delayed budget will include $2 trillion in new taxes. That's ill-advised even if the economy were humming along, but reckless given the current state of things.

When it comes to sky-high gas prices, Republicans at least understand that the root of the problem is too little oil supply, and in the Senate this week they tried to pass a bill to boost domestic oil production, only to be blocked by Democrats.

What do Democrats do instead? Demonize oil companies for making a profit and try to squeeze them for extra tax dollars. As President Obama said, "They are making tens of billions of dollars each — huge profits — while you're struggling to fill up your gas tank."

Never mind that less oil production and more oil industry taxes are the exact opposite of what's needed to bring gasoline prices down.

And while House Republicans advocate a serious Medicare reform plan that harnesses market forces to rein in the program's costs and protect it for the future, Democrats offer only fear.

Health and Human Services head Kathleen Sebelius said Ryan's Medicare plan would cause some seniors to "die sooner," and the Democratic National Committee proclaimed in an ad that Republicans are "now for killing" Medicare. The topper came in the Ryan-pushing-grandma-over-the-cliff ad, produced by a group headed by the DNC's former deputy national finance director. What's their Medicare solution? Nothing.

Democrats might think stoking envy and fear is politically sufficient, but we give the public more credit than that.

The country faces serious problems and voters deserve political leaders willing to step up and propose serious, credible solutions. As the last week made clear, they aren't getting anything like that from the party of FDR.



If Obamacare is so great, why do so many people want to get out from under it?

Question: What do the following have in common? Eckert Cold Storage Co., Kerly Homes of Yuma, Classic Party Rentals, West Coast Turf Inc., Ellenbecker Investment Group Inc., Only in San Francisco, Hotel Nikko, International Pacific Halibut Commission, City of Puyallup, Local 485 Health and Welfare Fund, Chicago Plastering Institute Health & Welfare Fund, Blue Cross Blue Shield of Tennessee, Teamsters Local 522 Fund Welfare Fund Roofers Division, StayWell Saipan Basic Plan, CIGNA, Caribbean Workers' Voluntary Employees' Beneficiary Health and Welfare Plan.

Answer: They are all among the 1,372 businesses, state and local governments, labor unions and insurers, covering 3,095,593 individuals or families, that have been granted a waiver from Obamacare by Secretary of Health and Human Services Kathleen Sebelius.

All of which raises another question: If Obamacare is so great, why do so many people want to get out from under it?

More specifically, why are more than half of those 3,095,593 in plans run by labor unions, which were among Obamacare's biggest political supporters? Union members are only 12 percent of all employees but have gotten 50.3 percent of Obamacare waivers.

Just in April, Sebelius granted 38 waivers to restaurants, nightclubs, spas and hotels in former Speaker Nancy Pelosi's San Francisco congressional district. Pelosi's office said she had nothing to do with it.

On its website, HHS pledges that the waiver process will be transparent. But it doesn't list those whose requests for waivers have been denied.

It does say that requests are "reviewed on a case by case basis by Department officials who look at a series of factors including" -- and then listing two factors. And it refers you to another website that says that "several factors ... may be considered" -- and then lists six factors.

What other factors may be considered? Political contributions or connections? (Unions contributed $400 million to Democrats in the 2008 campaign cycle.) The websites don't say.

In his new book, "The Origins of Political Order," Francis Fukuyama identifies the chief building blocks of liberal democracy as a strong central state, a society strong enough to hold the state accountable and -- equally crucial -- the rule of law.

One basic principle of the rule of law is that laws apply to everybody. If the sign says "No Parking," you're not supposed to park there even if you're a pal of the alderman.



How to Go to Congress and Become a Millionaire

Ever wonder how people go to Congress and become millionaires? A new academic report clears it up for us.

A report from four scholars, Alan J Ziobrowski; James W Boyd, Ping Cheng; and Brigitte J. Ziobrowski, titled Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives, shows that between 1985 and 2001 members of Congress enjoyed a considerable advantage over members of the public in their investment returns.

The article was published by Berkeley Electronic Press and is a follow up to a similar study done on investments by US Senators.

“A previous study suggests that U.S. Senators trade common stock with a substantial informational advantage compared to ordinary investors and even corporate insiders,” says the introduction to the report. “We apply precisely the same methods to test for abnormal returns from the common stock investments of Members of the U.S. House of Representatives. We measure abnormal returns for more than 16,000 common stock transactions made by approximately 300 House delegates from 1985 to 2001. Consistent with the study of Senatorial trading activity, we find stocks purchased by Representatives also earn significant positive abnormal returns (albeit considerably smaller returns). A portfolio that mimics the purchases of House Members beats the market by 55 basis points per month (approximately 6% annually).”

Actually 12 times .55 percent comes out to 6.6 percent annually. That .6 percent return accounts for an additional $130,000 over a 17 year period.

So how lucrative can the 6.6 percent advantage be for Senators and Representatives? A portfolio of $100,000 getting average stock market returns of 11 percent over a 17 year period would have grown to $589,000. If you were a member of the United States House of Representatives, though, enjoying the advantage that inside government information can bring you, your portfolio would have reached $1,573,000, according to an investment calculation I did using the finding from the study.

Assuming only average market returns for the next 20 years, a Representative would grow their portfolio to close to $13 million. Under the same circumstances US Senator would have grown the portfolio to $18 million.

The conclusion of the study favors some sort of reporting mechanism similar to those imposed upon corporate insiders. “We find strong evidence that Members of the House have some type of nonpublic information which they use for personal gain. That having been said, abnormal returns earned by Members of the House are substantially smaller than those earned by Senators during approximately the same time period. These smaller returns are due presumably to less influence and power held by the individual Members.”

While the sky wouldn’t fall if reporting requirements were imposed on members of Congress, the report misses the most obvious point.

Why do we have a federal government that can so substantially ensure winners and losers in investments and our economy? Isn't a system like that prone to corruption? Don't we witness the effects of that corruption in legislation like Obamacare, or the cadillac benefits offered public employees?

The report points out the even corporate insiders don’t enjoy the return advantages that members of Congress enjoy. It’s one of the most damning indications yet that the scope of government has gotten wildly out of control. It’s also another example of laws that Congress passes for the rest of us but won’t consider following. That’s a practice that must end if we want to restore confidence in government.

We can only do that by making sure that government can no longer pick winners and losers in the stock market.



Memorial Day Thanks and Devotion

Flip through the local paper, and you'll see that Memorial Day notices appear as sales headlines and attention-grabbers. Memorial Day Sale and Pre-Memorial Day. Pretty soon we'll see post-Memorial Day sale advertisements.
Similarly, television and radio are full of Memorial Day advertisements. I've even received a few Memorial Day Sale notices by e-mail during the time I've spent writing this column.

Sales and BBQ are the two things that many people think about when Memorial Day is mentioned. What else? Well, for many Americans, it's the weekend that the pool opens and summer begins.

But it means more than that. Memorial Day began as Decoration Day soon after the Civil War. Each year on this day, the graves of the fallen soldiers were decorated to honor the memory of their sacrifice to keep our country united. They gave the ultimate sacrifice.

The holiday can be traced back to John Logan, who served as an Illinois congressman prior to the Civil War, then volunteered as a Union soldier and was promoted during the war to general. He issued an order in 1868 to honor those who died in the war. At that time, he was serving as commander in chief of the Grand Army of the Republic, a fraternal organization of former Union soldiers.

"The 30th day of May, 1868, is designated for the purpose of strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country," stated the order. "We should guard their graves with sacred vigilance," it said, adding that their deaths were "the cost of free and undivided republic."

It was a high cost indeed. More than 600,000 American soldiers died during the Civil War, the most deadly war for Americans.

That first year, approximately 5,000 people gathered at Arlington Cemetery to decorate the graves with American flags. Since then, the custom has grown and spread.

Arlington Cemetery, located in Virginia across the Potomac from the Lincoln Memorial in Washington, is today the military graveyard of hundreds of thousands of United States soldiers. On a recent visit to our nation's capital, I had the opportunity to walk through the cemetery and visit the Tomb of the Unknown Soldier.

Walking through the cemetery, surrounded by thousands of small, white gravestones, perfectly aligned, row after row, it is easy to remember the sacrifice that has been made on our account. Soldiers have died. Families have lost sons, daughters, fathers, mothers, brothers, sisters and friends. There are miles and miles of trails through the cemetery.

At home, at the beach or at the pool, taking time to reflect on the importance of Memorial Day may prove difficult to do amid the sales and BBQs, the day off from work. But we should all pause and remember -- to honor those who have given their lives for our country and to dedicate ourselves to living in a way that ensures their sacrifices were not in vain.

One of the most fitting tributes to American soldiers is one that was given before Memorial Day was recognized -- President Abraham Lincoln's Gettysburg Address.

Lincoln delivered his address at the dedication of the Soldiers' National Cemetery at Gettysburg, Pa., in November 1863, while the Civil War was still raging. He was not the main speaker for the day, but had been invited as an afterthought. His speech was so short (less than two minutes) that the photographer did not have time to get a picture of him delivering it.

The speech, one of my favorites, is engraved in the Lincoln Memorial, across the river from Arlington National Cemetery.

Its 278 words don't include "I" or "me," but they do take the audience from our start as a nation and the American Revolution to Lincoln's wishes for the future of our nation.

"Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal. ... It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth."

This Memorial Day, let's give thanks, and increase our devotion, so that our soldiers will not have died in vain.



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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