Saturday, April 23, 2011

Reagan's Legacy and the Current Malaise: Lower taxes and a strong dollar could spur growth once again

Retired tax accountant Dick McDonald adds: "I suggest that the Revenue Act of 1981 that lowered the top marginal rate from 70% to 28% was a teaser but not the closer. It wasn't until his Revenue Act of 1986 when we closed down all the mainstream tax shelters and instead incorporated and used the ultimate in tax shelters -- the non-taxability of the appreciation in stock -- that we took off"

Reagan came into the White House facing an economy as troubled as ours-one that had even higher unemployment, catastrophic interest rates (18% for mortgages) and a stock market that in real terms had fallen 60% from its mid-1960s levels. When he left office eight years later, the U.S. had become an economic miracle: 18 million new jobs had been created; Silicon Valley had blossomed, becoming a global symbol for innovation; and the stock market was experiencing a bull run that, despite dramatic ups and downs, didn't end until the turn of the 21st century, after the Dow had expanded 15-fold. The expansion of the U.S. economy exceeded the entire size of West Germany's economy, then the world's third-largest.

How did this happen? You could make the case that Reagan's economic miracle had its origins at a Washington, D.C., restaurant in 1974. That December night, 34-year-old University of Chicago professor, Art Laffer, scribbled a single-and now legendary-curve on a cocktail napkin to illustrate to a group of President Ford's advisers why a proposed plan to raise taxes would not increase government revenues. Mr. Laffer posited that deep cuts in existing tax rates would stimulate the economy and ultimately lead to far higher government revenues. Conversely, increase the tax burden and government receipts would fall below expectations because of a weaker economy.

Mr. Laffer's curve headed off the tax boost, but the Ford people did not accept the conclusion that big reductions in tax rates were just what the anemic U.S. economy needed. However, when Reagan met with Mr. Laffer and other like-minded thinkers several years later, he quickly grasped the Laffer Curve's fundamental message.

The concept that a free market unencumbered by barriers, government regulation and taxation will create the most growth-friendly economic environment was simple but radical. After taking the oath of office, Reagan went to work to convince the American people of the benefits of supply-side economics: lower taxes, less regulation, and less government spending, as well as a monetary policy focused on ridding us of the seemingly incurable disease of ever-rising inflation.

Reagan's program was a resounding success. Its centerpiece was the Economic Recovery Tax Act of 1981, which dramatically cut income tax rates for everyone. He managed to pass the bill during his first eight months in office, with bipartisan support in a divided Congress.

Critics howled that Reagan was being financially irresponsible, but the president pressed on. Once his cuts were fully phased-in and the hard fight against inflation was won, the economy took off like a rocket. Reagan's achievements set up a great, long boom in the U.S. and the world that didn't end until the economic crash in 2007. (Yes, there were periods of slower growth rates before that year, but none can be compared to the crash of 2007.)

At the same time, Reagan's British counterpart, Prime Minister Margaret Thatcher, was accomplishing similar feats by taking an axe to Britain's draconian tax system. Almost overnight, Britain went from being Europe's economic weak link to being the continent's most vibrant large economy.

Unfortunately, Reagan was unable to permanently rein in domestic spending and many of his reforms were undone by his successors. Washington politicians slid back into their bad habits, cluttering the tax code with new brackets, exemptions, deductions, phase-ins, carve-outs and special breaks for special interests. And the crucial importance of a strong dollar has been forgotten during the last decade, with terrible results. Today we are once again beset by a Carter-esque malaise, wherein we must accept abnormally high unemployment and the notion that printing more dollars is the way to recovery.

Yet Barack Obama's 2011 State of the Union address was sprinkled with Reagan-like phrases, full of the 40th president's trademark confidence. "The future is ours to win," Mr. Obama said. "But to go there, we can't just stand still." He pledged to "knock down barriers that stand in the way of [American companies'] success." We were told that the president had held meetings with Reagan administration officials, and that he'd even read Lou Cannon's biography of Reagan during his winter vacation.

It's true that both men came into office facing turbulent economies. But there the similarities end.

Reagan aggressively embraced free-market, supply-side principles that empowered the American people to rebuild and creatively expand our economy and standard of living. In contrast, the Obama administration has expanded the powers of government over us and our economy on a scale never before seen in peacetime American history. President Reagan understood, and fervently believed in, the American spirit of free enterprise. So far, President Obama hasn't shown that he does. Mr. Obama still has time to learn the real lessons of Reagan's success. Will he?



Obama desperate to protect thug unions

National Labor Relations Board says Boeing can't build plant in South Carolina

By Rick Manning - In a stunning move well beyond the scope of their legal mandate, the Obama Administration appointee controlled National Labor Relations Board is suing Boeing Corporation for, get this, building a second production line for their new Dreamliner passenger plane in South Carolina rather than in Washington state.

At a time when corporations like General Electric are busily shutting down U.S. production facilities that manufacture items like light bulbs, in favor of Chinese made products, Boeing had the audacity to decide to create jobs in America. Although maybe the Obama appointed NLRB members missed the part of U.S. history class where the Confederacy lost, and South Carolina remained a part of the U.S.?

Rightfully, Boeing is going to fight the NLRB decision to sue them. One irony of the case is that Obama's recently appointed Chief of Staff, Bill Daley, served as a member of Boeing's Board of Directors when the company decided to create jobs in South Carolina by building a production line in the right to work state.

And that is the heart of the matter. South Carolina is a right to work state whose voters this past November overwhelmingly amended their state's constitution to ensure that a worker has the right to vote on whether they want to be represented by a labor union. The workers at the Boeing plant in South Carolina have also taken the bold step of booting out the union that represented them, effectively ending the International Association of Machinists and Aerospace Workers stranglehold on Boeing production.

Now, Obama's NLRB is attacking Boeing's job creation in South Carolina as "union retaliation" directly related to a 2008 labor strike which crippled Boeing's production in Washington state.

This isn't the first time that the NLRB has targeted South Carolina, as earlier this year they had threatened to use taxpayer dollars to sue the state, along with the states of Utah, South Dakota and Arizona, because their citizens had the audacity to put a workers right to a secret ballot vote in union elections into their respective state constitutions. In direct response to the NLRB lawsuit threat, Congressman Jeff Duncan of South Carolina has introduced legislation prohibiting the NLRB from proceeding with the lawsuit, and has already been joined by 30 co-sponsors.

On top of the dramatic overreach on behalf of the labor union directed board, which was designed by Congress to be a neutral arbiter in labor/management disputes, an astounding 176 members of the U.S. House of Representatives recently voted to completely defund the agency in an amendment offered by Rep. Tom Price of Georgia this past February.

The ultimate irony of the NLRB decision is that this government agency is attempting to tell a company where they can locate a plant in the United States. If successful, other U.S. companies will take note, and not make the mistake of building plants in right to work states, instead opting for more desirable overseas locations that are beyond the reach of Obama's union zealots.

Can anyone wonder why U.S. job creation has been virtually non-existent?



An example of how high tax rates work

At 35 percent, America's corporate tax rates are among the world's highest -- but such rates may well collect the least

General Electric, the nation's largest corporation, paid no federal taxes in 2010. The profitable company, which shaved 20 percent of its U.S. work force in less than a decade, should inspire a hard look at corporate tax rates and how taxes are collected and avoided. Cash-strapped working Americans are paying GE's bill.

OUTRAGE and envy still ripple from a report in The New York Times that General Electric, the nation's largest corporation, paid no U.S. corporate taxes in 2010.

Zero. Zip. Nada. Indeed, the company, with $14.2 billion in worldwide profits, claimed a tax benefit of $3.2 billion from Uncle Sam.

GE did not break the law, but the bill it successfully avoided was picked up by the rest of us, or put on the national credit card.

The top U.S. corporate rate is 35 percent, but virtually no one pays that. GE's tax rate is about a third of what other companies pay, and that the company is vulnerable to pay any taxes is hypothetical. GE would have to return profits to these shores from places it set up to avoid taxes.

Policymakers in Washington, D.C., need to reassess rates to bring them into line with the financial realities of the nation and basic equity. Set lower, unavoidable rates that do not complicate job creation, and have a statutory imperative to collect them. As it is now, the higher the rate, the more creative the credits, shelters and loopholes to avoid compliance.

GE has a team of 975 gilded tax-avoidance professionals in a department working to ensure that the rest of America picks up its tab. Oh, and that default jobs-creation rationale? The Times report also noted that since 2002, GE has eliminated a fifth of its work force in the U.S.

Washington Post columnist Robert J. Samuelson, a veteran financial journalist, would cut corporate tax rates, not increase them, and make up the difference by increasing individual tax rates on corporate dividends and capital gains, which he sees as a giveaway to the rich.

U.S. corporate rates are chasing profits offshore, and the only jobs created are for tax lawyers. Set and collect realistic rates.



Progressive Media and the War on the Unborn

A pathetic blogger at the left-wing blog Wonkette made fun of Sarah Palin's son Trig, who has Down syndrome. Dana Loesch of Andrew Breitbart's Big Journalism website has exposed this whole sordid affair, noting, "This is what happens when a little-known blogger who edits the literary equivalent of the bathroom wall in Walmart isn't clever enough to either write satire or convey why he doesn't like the Palins. And this is considered acceptable by progressives."

What drives a left-wing blogger to mock a little boy with a disability? Is it just hatred for Sarah Palin, a pro-life mother who exposes what is at stake in the battle over the "right to choose?" Or is it that a mother would bring a child with Down syndrome into the world?

This controversy is important because of what it says about the progressive mentality. The progressives, who like to think of themselves as guardians of the most vulnerable and defenseless among us, do not have any sympathy for people they believe should not exist or be born. They believe that a mother should terminate the life of a baby with potential defects. This is not only because of their belief that women's rights always trump the rights of the unborn, but because it is too costly to take care of them, once they come into the world. They support Big Government and higher spending, except on babies whose visible and active lives would make left-wing feminists, a key part of their constituency, feel uncomfortable.

The Wonkette controversy goes far beyond a blogger with bad taste and no conscience. It tells us a lot about the mentality of the progressives in charge of the federal government who are moving ahead with implementation of Obamacare.

It is a fact that when government takes more and more control over the health care of the people, the government will inevitably take over more and more decisions about who lives and who dies. This is the obvious danger that confronts us as Obamacare unfolds. However, in the U.S., at least for the time being, we can make most of those decisions for ourselves. The news is breaking that "Baby Joseph" has returned to Canada, after receiving medical treatment from U.S. hospitals that he couldn't get in his native country, which has socialized medicine. The costs of the medical operation, which left the child free from tubes and machines, were borne by Priests for Life.

In New Zealand, which also has socialized medicine, the situation is even more dire, as the government promotes the screening and killing of unborn children diagnosed with Down syndrome. As I noted in a previous column, "The new government policy in New Zealand was preceded by the completion of a report on the `cost effectiveness' of aborting Down syndrome babies. It was determined that it was just too expensive to allow these babies to live."

However, it appears that "60 Minutes"-the version that airs in New Zealand-may be turning a critical eye on what the government has been doing.

Mike Sullivan, a professional engineer in New Zealand, is the father of an almost-three-year-old girl with Down syndrome and an advocate for the rights of the handicapped. He says the upcoming New Zealand "60 Minutes" show covers the government's "quality improvement" program that was introduced last year and targets unborn babies with Down syndrome for eradication through preventing births. "For those who are not aware of this issue," he says, "the government's screening program is preventing the births of 75 percent of people with Down syndrome and is a gross form of discrimination against this group of people, treating these people as less human than others."

He says the documentary will cover these areas:

* The legal action that is being taken out by 23 parents and Right to Life of New Zealand against the government of New Zealand for crimes against humanity.

* Evidence that the government deliberately avoided public consultation on the new program and has excluded people with Down syndrome in their decision making.

* Evidence that the government understood the consequences of the program would be to reduce the number of births of people with Down syndrome.

* Presenting the everyday lives of people with Down syndrome, who are just "getting on with life like the rest of us."

Sullivan says that while it is not entirely confirmed, it looks like "60 Minutes" of New Zealand will air the story next Wednesday, April 27. While the audience is in New Zealand, the program could be a warning of what could happen to America's most vulnerable under Obamacare.



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)


Friday, April 22, 2011

The Rich Aren’t Getting Richer

Actual super-wealthy households saw their income decline

Are the rich really getting richer? That’s a pretty standard line from the Left. This is not true.

The numbers generally cited in support of this argument do not actually tell us much about what has happened to the incomes of wealthy households over time. That’s because the people who are in the top bracket today are not the people who were in the top bracket last year. There’s a good deal of socioeconomic mobility in the United States — more than you’d think. Our dear, dear friends at the IRS keep track of actual households (boy, do they ever!), and sometimes the Treasury publishes data about what has happened to them. For instance, among those who in 1996 were in the very highest income group isolated for study — the top 0.01 percent — 75 percent were in a lower income group by 2005. The median real income of super-rich households went down, not up. The rich got poorer. Among actual households, income grew proportionally more for those who started off in the low-income groups than those that began in high-income groups.

That wasn’t even an unusually good decade in terms of mobility. During the horrible, horrible Reagan years, as National Review noted back in 1991, the average income growth for actual households in the lowest income bracket was 77 percent over the course of a decade; income growth for actual households in the top group was only 5 percent during those same years. Of those who were in the poorest fifth in 1979, 85.8 percent had moved to a higher bracket by 1988, and 14.7 percent of them moved to the top bracket — which is to say, the poor of 1979 were more likely to be the rich of 1988 than to be the poor of 1988. The poor got richer, and some of them got a lot richer. Reagan’s record has not been matched — Ronald Reagan was the champion of the poor, as it turns out — but economic mobility has been pretty stable for the past 20 years: About 50 percent of U.S. households move from one income group to a different one every decade, and actual households initially in the low-income groups see proportionally more income growth than do actual households initially in the high-income groups.

When somebody says that that top 1 percent saw its income go up by X in the last decade, they are not really talking about what happened to actual households in the top 1 percent. Rather, they are talking about how much money one has to make to qualify for the top 1 percent. All that really means is that the 3 million highest-paid Americans in 2010 made more money than did the 3 million highest-paid Americans in 2000, the 100,000 highest-paid Americans this year made more money than did the 100,000 highest-paid Americans made in 2000, that the 50,000 highest-paid Americans made more money this year than did the 50,000 highest-paid Americans made in 2000, that the 1,000 highest-paid Americans this year made more money than did the 1,000 highest-paid Americans made in 2000, etc., which is not shocking. But, as the Treasury data show: They are not the same people.

* Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within ten years.

* About 55 percent of taxpayers moved to a different income quintile within ten years.

* Among those with the very highest incomes in 1996 — the top 1/100 of one percent — only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.

* The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).

* Economic growth resulted in rising incomes for most taxpayers over the study period: Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation; real incomes of two-thirds of all taxpayers increased over this period; and median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.

Or, as the authors of the study put it: “While the share of income of the top 1 percent is higher than in prior years, it is not a fixed group of households receiving this larger share of income"



Poverty Is Easy to Explain

There is very little either complicated or interesting about poverty. Poverty has been man’s condition throughout his history. The causes of poverty are quite simple and straightforward. Generally, individual people or entire nations are poor for one or more of the following reasons: (1) they cannot produce many things highly valued by others; (2) they can produce things valued by others but they are prevented from doing so; or (3) they volunteer to be poor.

The true mystery is why there is any affluence at all. That is, how did a tiny proportion of man’s population (mostly in the West) for only a tiny part of man’s history (mainly in the nineteenth, twentieth, and twenty-first centuries) manage to escape the fate of their fellow men?

Sometimes, in reference to the United States, people point to its rich endowment of natural resources. This explanation is unsatisfactory. Were abundant natural resources the cause of affluence, Africa and South America would stand out as the richest continents, instead of being home to some of the world’s most miserably poor people. By contrast, that explanation would suggest that resource-poor countries like Japan, Hong Kong, and Great Britain should be poor instead of ranking among the world’s richest places.

Another unsatisfactory explanation of poverty is colonialism. This argument suggests that third-world poverty is a legacy of having been colonized, exploited, and robbed of its riches by the mother country. But it turns out that countries like the United States, Canada, Australia, and New Zealand were colonies; yet they are among the world’s richest countries. Hong Kong was a colony of Great Britain until 1997, when China regained sovereignty, but it managed to become the second richest political jurisdiction in the Far East. On the other hand, Ethiopia, Liberia, Tibet, and Nepal were never colonies, or were so for only a few years, and they rank among the world’s poorest and most backward countries.

Despite the many justified criticisms of colonialism and, I might add, multinationals, both served as a means of transferring Western technology and institutions, bringing backward peoples into greater contact with a more-developed Western world. A tragic fact is that many African countries have suffered significant decline since independence. In many of those countries the average citizen can boast that he ate more regularly and enjoyed greater human-rights protections under colonial rule. The colonial powers never perpetrated the unspeakable human rights abuses, including genocide, that we have seen in post-independence Burundi, Uganda, Zimbabwe, Sudan, Central African Empire, Somalia, and elsewhere.

Any economist who suggests he has a complete answer to the causes of affluence should be viewed with suspicion. We do not know fully what makes some societies richer than others. However, we can make guesses based on correlations. Start out by ranking countries according to their economic systems. Conceptually we could arrange them from more capitalistic (having a larger free-market sector) to more communistic (with extensive State intervention and planning). Then consult Amnesty International’s ranking of countries according to human-rights abuses. Then get World Bank income statistics and rank countries from highest to lowest per capita income.

Compiling the three lists, one would observe a very strong, though imperfect, correlation: Those countries with greater economic liberty tend also to have stronger protections of human rights. And their people are wealthier. That finding is not a coincidence, so let us speculate on the relationship.

Rights and Prosperity

One way to gauge human-rights protection is to ask to what extent the State protects voluntary exchange and private property. These signify the rights to acquire, keep, and dispose of property in any fashion so long as one does not violate the rights of others. The difference between private property rights and collectively held rights is not simply philosophical. Private property produces systemically different incentives and results from collective property.

Since collectivists often trivialize private property rights, they are worth elaborating. When property rights are held privately the costs and benefits of decisions are concentrated in the individual decision maker; with collectively held property rights they are dispersed across society. For example, private property forces homeowners to take into account the effect of their current decisions on the future value of their homes, because that value depends, among other things, on how long the property will provide housing services. Thus privately owned property holds one’s personal wealth hostage to doing the socially responsible thing—economizing scarce resources.

Contrast these incentives to those of collective ownership. When the government owns the house, the individual has less incentive to take care of it simply because he does not capture the full benefit of his efforts. It is dispersed across society instead. The costs of neglecting the house are similarly spread. You do not have to be a rocket scientist to predict that under these circumstances, less care will be taken.

Nor is nominal collective ownership the only force that weakens social responsibility. When government taxes property, it changes the ownership characteristics. If government were to impose a 75 percent tax on a person selling his house, it would reduce his incentive to use the house wisely.

This argument applies to all activities, including work and investment. Whatever lowers the return from or raises the cost of an investment reduces incentives to make that investment in the first place. This applies to investment in human as well as physical capital—that is, those activities that raise the productive capacity of individuals.

To a significant degree the wealth of nations is embodied in their people. The starkest example of this is the experience of the Germans and Japanese after World War II. During the war, Allied bombing missions destroyed nearly the entire physical stock of each country. What was not destroyed was the human capital of the people: their skills and education. In two or three decades, both countries reemerged as formidable economic forces. The Marshall Plan and other U.S. subsidies to Europe and Japan cannot begin to explain their recovery.

Proper identification of the causes of poverty is critical. If it is seen, as is too often the case, as a result of exploitation, the policy recommendation that naturally emerges is income redistribution—that is, government confiscation of some people’s “ill-gotten” gains and “restoration” to their “rightful” owners. This is the politics of envy: bigger and bigger welfare programs domestically and bigger and bigger foreign-aid programs internationally.

If poverty is correctly seen as a result of the unwise government intervention and lack of productive capacity, more effective policy recommendations emerge.



Obama vs. Palin

The contrast between the speeches they gave last week suggests that when the 2012 presidential campaign begins in earnest, the news media will have difficulty maintaining the story lines they've been pushing about Barack Obama and Sarah Palin.

Mr. Obama is "a great leader in the mold of Abraham Lincoln and Franklin D. Roosevelt," we were told during the last presidential campaign.

The journalists who assured us of this based their assessment on Mr. Obama's oratorical skills rather than upon his actual accomplishments, which were meager.

His opponents agree Mr. Obama is a better speaker than he is a president. But the fiscal policy speech he made at George Washington University last Wednesday (4/13) -- during which Vice President Joe Biden nodded off -- indicates he's not that terrific an orator, either.

The speech "was not just weak, but pitiful,' a "waste of breath," said Clive Crook, editor of the Atlantic magazine.

Comedian Stephen Colbert thought the speech was "boring." Comedian Jon Stewart mocked the tortured manner in which Mr. Obama tried to avoid describing the tax increases he was proposing as tax increases.

And these are supporters of the president.

Mr. Obama went to GWU to make up for an earlier failure of leadership. In February, he submitted a proposed budget so frivolous no one paid attention to it. This permitted House Republicans to capture the initiative in the debate with the very substantial budget plan authored by Rep. Paul Ryan.

The president invited Rep. Ryan to attend the speech, which he did, expecting to hear a serious counterproposal. What he heard instead was "the sort of harangue one would expect from a rabidly devoted partisan hack, with no relation whatever to the thoughtful appeals to reason and common values that historically have characterized presidential leadership," said the Washington Examiner.

Mr. Obama grossly misrepresented Mr. Ryan's plan and called him names, but offered no real plan of his own to reduce our $14 trillion national debt.

The president's speech was "dishonest even by modern political standards," said the Wall Street Journal.

It was churlish of the president to invite Rep. Ryan to the speech, and then to attack him from the podium. It was also cowardly to attack a political opponent in a forum in which he could not respond.

Barack Obama these days speaks only before friendly audiences. On Saturday (4/16), Sarah Palin journeyed to Madison, Wisconsin where she braved snow, cold, and union protesters who tried to disrupt her Game On! speech by beating drums and blowing whistles.

"Sarah Palin rides to the sound of the guns," noted Reuters columnist James Pethokoukis.

After her surprise selection as John McCain's running mate and subsequently, many in the news media have described the former Alaska governor as an ignorant bumpkin with extreme views.

Ms. Palin sure didn't sound that way in Madison. In a 15-minute speech Mr. Pethokoukis described as "powerful, pugnacious and presidential," Ms. Palin vigorously defended Wisconsin Gov. Scott Walker in his battle with public employee unions; slammed President Obama for his attack on Paul Ryan, and criticized Congressional Republicans for being too timid in opposing Mr. Obama's spending.

"She was feisty. She was bold. She was gutsy," said Jedediah Bila in the Daily Caller.

Ms. Palin was also concise and funny. Of President Obama's budget, she said: "We're flat broke and he thinks these solar shingles and really fast trains will save us. So now he's shouting ‘all aboard' his bullet train to bankruptcy. Win the Future? WTF is about right."

"If Sarah Palin's not running for president, what a terrible waste that would be of the best stump speech I've heard since, well, Palin's ‘08 convention speech," said John Nolte of Big Government.

Ms. Palin scores low in polls today, chiefly because of how thoroughly the news media have maligned her. But the Sarah Palin on display in Madison was nothing like the media caricature. As more Americans see that Sarah, her numbers will change.

Barack Obama also is nothing like the news media's description of him. As Americans see more of the detached, petulant, clueless and spiteful little man on display at George Washington University, his numbers will change, too.



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)


Thursday, April 21, 2011

Where the Tax Money Is

Obama targets the middle class while pretending to tax only the rich

A dominant theme of President Obama's budget speech last Wednesday was that our fiscal problems would vanish if only the wealthiest Americans were asked "to pay a little more." Since he's asking, imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%.

Let's stipulate that this is a thought experiment, because Democrats don't need any more ideas. But it's still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit. The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that's where the big money is.

Consider the Internal Revenue Service's income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the "millionaires and billionaires" Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That's five times Mr. Obama's 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.

We recognize that 2008 was a bad year for the economy and thus for tax receipts, as payments by the rich fell along with their income. So let's perform the same exercise in 2005, a boom year and among the best ever for federal revenue. (Ahem, 2005 comes after the Bush tax cuts that Mr. Obama holds responsible for all the world's problems.)

In 2005 the top 5% earned over $145,000. If you took all the income of people over $200,000, it would yield about $1.89 trillion, enough revenue to cover the 2012 bill for Medicare, Medicaid and Social Security—but not the same bill in 2016, as the costs of those entitlements are expected to grow rapidly. The rich, in short, aren't nearly rich enough to finance Mr. Obama's entitlement state ambitions—even before his health-care plan kicks in.

So who else is there to tax? Well, in 2008, there was about $5.65 trillion in total taxable income from all individual taxpayers, and most of that came from middle income earners. The nearby chart shows the distribution, and the big hump in the center is where Democrats are inevitably headed for the same reason that Willie Sutton robbed banks.

This is politically risky, however, so Mr. Obama's game has always been to pretend not to increase taxes for middle class voters while looking for sneaky ways to do it. His first budget in 2009 included a "climate revenues" section from the indirect carbon tax of cap and trade, which of course would be passed down to all consumers. Such Democratic luminaries as Nancy Pelosi have often chattered about a European-style value-added tax, or VAT, which from a liberal perspective has the virtue of applying to every level of production or service and therefore is largely hidden from the people who pay it.

Now that those two ideas have failed politically, Mr. Obama is turning as he did last week to limiting tax deductions and other "loopholes," such as for mortgage interest payments. We support doing away with these distortions too, and so does Mr. Ryan, but in return for lower tax rates. Mr. Obama just wants the extra money, which he says will reduce the deficit but in practice will merely enable more spending.

Keep in mind that the most expensive tax deductions, in terms of lost tax revenue, go mainly to the middle class. These include the deductions for state and local tax payments (especially property taxes), mortgage interest, employer-sponsored health insurance, 401(k) contributions and charitable donations. The irony is that even as Mr. Obama says he merely wants the rich to pay a little bit more, his proposals would make the tax code less progressive than it is today.

Mr. Ryan isn't proposing controversial entitlement reforms because he likes pointless political risk, or because he likes being berated to his face from a front row seat, as he was on Wednesday. Medicare and Medicaid spending are consistently growing two to three times faster than the rest of the economy, while Medicare's cash-in-cash-out financing model means that seniors collect far more in benefits than they paid in taxes over their working lifetime. The entitlement state was designed for another era.

Mr. Obama's speech was disgraceful for its demagoguery but also because it contained nothing remotely commensurate to the scale of the problem. If the President had come out for a large tax on the middle class, like a VAT, then at least the country could have debated the choice of paying for the government we have or modernizing it a la Mr. Ryan so it is affordable.

Instead the President will continue targeting the middle class for tax increases to pay for an entitlement state on autopilot, while claiming he only wants to tax the rich.



Trump won't release tax info unless Obama provides birth certificate

If Donald Trump runs for president, he says he won't release his tax returns unless President Obama releases his birth certificate.
The latest attention-grabbing sound bite from the media mogul came in an interview with ABC's George Stephanopoulos Tuesday, during which Trump was decidedly non-committal on what his policy toward tax disclosure will be. A presidential candidate is not required by election law to disclose tax returns, though most voluntarily do.

"I think I may tie mine into his birth certificate. But I've built a great company," Trump said. "It's a strong company. It's an under-levered company. I've got a lot of cash and a tremendous net worth, far greater than even numbers that you've read."
But Trump added that he will disclose his financial entanglements and net worth - a figure that few have been able to estimate with any confidence.

"I have a great company. I've done a great job. Which if I run, you'll see what a great job. Because I'll do a full disclosure of finances," he said.



Statists and the Racial 'Health Gap'

I often speculate that deep in the bowels of the Obama administration there exists an obscure office charged with inventing egalitarian schemes to increase American dependency on government. Ignore the high-sounding "fairness" and "equality" rhetoric. The President's minions just cannot stop pushing, even boldly lying until the last vestiges of limited government and individual initiative are history.

The latest eruption of this endeavor was recently announced by Dr. Howard Koh, Assistant Secretary of Health and Human Services: the federal government would close the health gap between "minorities" and whites. These health disparities, he added, have burdened our country for too long (go here for the official statement).

This is a remarkably slapdash proposal that would make a hardcore Stalinist blush. It will probably never fully get off the ground, but as a window to what passes as "policy" in the statist Obama administration, it is invaluable.

The proposal makes race/ethnic differences central. This is unlike Marxist egalitarianism that stressed economic inequalities. Now, however, race and ethnicity trump economics, so rich African Americans, but not poor whites, are "disadvantaged." This is tribalism and, pray tell, how do racial/ethnic differences, not the actual level of illness, "burden" the US? What if all whites were struck with a plague? Would this lessen our "burden"? Would health care now be more "fair"? Might liberal whites volunteer to become sick so as to reduce inequality? Moreover, given the murkiness of racial and ethnic distinctions, proper implementation will require Nazi-style Nuremburg-like laws to certify racial/ethnic identity.

Second, how will this venture be financed in today's tough economic times? No problem, according to program advocates since: (a) we don't know how much the program will cost; and (b) the money is already there and not subject to congressional review. So, a program lacking a price tag is being proposed but whatever the cost, no congressional approval is needed. The need for compulsory remedial Political Science 101 is obvious.

Let's consider the actual crusade. Minorities are clearly less healthy than whites as indicated by incidences of heart disease, diabetes, infant mortality, certain cancers, asthma, and kidney disease (see here). But, disentangling this race/ethnicity/income/health relationship is a nightmare and entails some awkward unspeakable PC issues that warrant attention (see here). For example, certain racial groups may be genetically pre-disposed toward some illnesses (e.g., Hispanics and asthma, blacks and hypertension). Perhaps only genetic engineering can close these gaps so why waste millions better spent elsewhere? And, how do we address health problems like osteoporosis that disproportionally afflict whites?

Even more awkward, some minority group members may prefer shopping to annual checkups, even low-cost insurance, and why should government dictate these personal priorities? Surely the risks of AIDS and sexually transmitted diseases (both of which affect minorities) are known and perhaps these illnesses just reflect poor judgment, not equal access to health care. Alas, all these complicated issues are swept aside to level healthiness.

Nevertheless, how can gaps be closed? Proposed measures are a grab bag of half-baked ideas that all rest on the supposition that those disproportionally prone to illness really want to be healthy but, for some inexplicable reasons, just cannot secure the required medical benefits. There is the predictable call for recruiting more "under-represented populations" to the health profession (i.e., affirmative action). In fact, a 2009 Report on this health gap made diversifying the health profession central to improving minority health, as if black doctors could better treat black patients. The government will also collect more health data sub-divided according to race and ethnicity, a tactic that guarantees uncovering even more "unfairness."

The solution also includes hiring armies of busy-body scolds. For example, since Hispanic youngsters fail to get adequate dental care, the government will employ Spanish-speaking promotoras to "guide" their neighbors to regular dental check-ups. Similarly, local community health workers will be paid to teach neighbors about diabetes and the importance of following doctor recommendations, while Head Start programs will now also target parents needing medically-related prodding. Add an incentive program to entice minorities to seek better medical treatment, increased funding for asthma care, a national registry of interpreters to help non-English speakers when visiting doctors and hospitals, more research funds for studies on illness that unequally affect minorities and more community meetings to solicit advice on how to help minorities be healthier. How all of this can be accomplished with already available funds remains to be seen.

The tip-off to the underlying paternalism is the assumption that poor health reflects a lack of access to fresh fruits and vegetables plus barriers to physical activity. This is a familiar refrain from America's egalitarian Mandarins -- without government intercession broccoli and apples are beyond reach, and so minorities will naturally (and foolishly) choose double bacon cheeseburgers. Similarly, without Washington's counsel, minorities are incapable of walking, jogging, or doing sit-ups in their living room. In a sense, minorities are viewed as young children unable to help themselves, and, furthermore, capitalist markets just refuse to satisfy minority customer demand for fresh produce or gyms. Where is capitalist greed when we need it?

But, mere foolishness disguises the real agenda. If one digs a little deeper than upbeat media news accounts the program's real purpose emerges -- promoting statism (see here). The aim is not just helping African Americans get cheaper, more convenient colonoscopies. In particular, since all this haranguing to eat better, stop smoking, have safe sex, etc., etc. will probably not reduce the healthcare gap (consider all the past failed public health PR campaigns), the only sure outcome is more bloated government as efforts are multiplied. HHS openly links the initiative to ObamaCare and explicitly hopes to "transform" health care, hardly the type of program that could be funded without recourse to congressional approval.

This will be a gigantic make-work boondoggle and highly invasive, to boot. I can already visualize the federal food police raiding local "snack houses" where obese teenagers secretly devour Ho-Hos and Ding Dongs. Tens of thousands of promotoras will have to hired (and trained) to pester fellow Hispanics to get annual check-ups and good luck to all those community organizers going door-to-door waging war on Kentucky Fried Chicken. Expand the definition of "health" to include some criminal behaviors and parental neglect of children and this "modest" program may soon rival Medicaid.

Unfortunately, this latest Obama state-expanding scheme is not unique. Michelle Obama's effort to cut childhood obesity is just as bad if one peeks behind the curtain (see Meghan Clyne, "Michelle's Machine," The Weekly Standard, April 11, 2011). Working through the White House Office of Faith Based and Neighborhood Partnership the Obama administration has enlisted churches to snarl millions more into state dependency. For example, congregations are now implored to push as many parishioner children as possible into government subsidized school meal programs, and if that option is unavailable, get their meals and snacks reimbursed through Washington's Child Adult Care Food Program. Meanwhile, the churches themselves are encouraged to serve as feeding sites for the Summer Food Service Program, among other government-funded social welfare programs. In sum, religion and "improved childhood nutrition" are being twisted into bloating the deficit while building habits of dependency. This "faith-based" initiative is nothing more than re-packaging the infamous late 1960s Cloward-Piven strategy of sharply expanding the welfare rolls to bankrupt government so as to usher in socialism.

No doubt, these particular state-expanding programs will soon expire from fiscal starvation and, hopefully, a regime change. Nevertheless, it is critical to sound the clarion call about what's occurring, sometimes almost invisibly, deep within the Obama administration. This is more than fiscal wastefulness or inept policy-making; these programs are deeply antithetical to limited government and individualism and thus deserve an appellation not lightly applied in today's policy debates -- they are evil.

SOURCE (See the original for links)



Does economic growth reduce poverty?: "It’s quite misleading to claim that Irish economic growth didn’t reduce poverty. The OECD uses a relative definition of poverty -- the 'percentage of persons living with less than 50% of median equivalised household income.' Poor people in Ireland (and Belgium) are a lot less poor than they were thirty years ago with regard to the options they have available to them. The gap between them and the rich might be wider, but this matters less to most people than their life expectancies, economic security levels, and other absolute values."

Ending farm welfare as we know it: "Just about everything in Wisconsin Rep. Paul Ryan's budget blueprint has caught unshirted hell from critics: the tax rates, the Medicare vouchers, the safety-net cuts. The one thing that hasn't? The cuts to farm subsidies. If past is prologue, that means the subsidies are probably safe."


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)


Wednesday, April 20, 2011

Obama's agenda of hate

Barack Obama’s budget address last week ranks among the most dishonest and dishonorable presidential speeches in generations. It contained an avalanche of false and misleading statements. It was shallow and bitterly partisan. Yet the speech served a useful purpose: It provided the American people in general, and Republicans in particular, with the basic line of attack President Obama will use between now and the 2012 election.

The White House strategy is clear: argue that Obama wants to restore fiscal balance by raising taxes on “millionaires and billionaires” while those who don’t favor higher taxes on the wealthy are fundamentally unserious. As a political matter, of course, class warfare does not have a particularly successful track record. But, to keep it that way, Republicans need to provide a compelling response to the Obama strategy. Fortunately such a response exists.

Obama’s argument is built on sand. A tax increase on the wealthy would fall far short of the revenues needed to reverse our fiscal trajectory. Our budget problems are significantly worse today than they were in the 1990s. There are not nearly enough wealthy people in the nation to tax in order to tame our debt. If the president wants higher taxes to improve our fiscal imbalance, he will need to embrace a massive middle-class tax increase and/or a value added tax (VAT). But Obama hasn’t shown the slightest preference for that option. It’s pure fiction to pretend that higher taxes on those making more than $200,000 will make much of a dent in our debt, given the size of our long-term spending problem. Obama’s argument isn’t with Republicans. It’s with basic arithmetic.

Republicans need to unmask the philosophy guiding modern liberalism when it comes to taxes. What liberals are interested in isn’t growth so much as egalitarianism and redistribution for its own sake. For many on the left, increasing taxes isn’t about economics as much as morality. They believe taxing the wealthy is a virtue, to the point that they would penalize “the rich” even if that has harmful economic consequences. Recall that during a campaign debate, when asked by Charles Gibson about his support for raising capital gains taxes even if that caused a net revenue loss to the Treasury, Obama sided with tax increases “for purposes of fairness.”

Higher taxes would keep our current welfare state in place for only a little while longer. The entitlement apparatus would remain unsustainable. Tax increases might slightly delay, but could not forestall, a fiscal crack-up. The only thing that can is reconfiguring and restructuring our entitlement programs, most especially Medicare. That is what Paul Ryan’s plan does—and what President Obama’s budget avoids doing.

The point cannot be made often enough: Modern liberalism, as embodied in the Obama presidency, is the defender of the status quo. And the status quo is a road to economic ruin.

It is important for Republicans to put this debate in the right frame. Left unaddressed, our crushing burden of debt will cripple the American economy. Yet the aim of conservatism isn’t simply lower deficits and debt. It’s also limited government and a thriving society. A leviathan state is injurious because of its effect on civic character, because it undermines self-reliance and creates dependency. And this, in turn, results in an enervation of the entrepreneurial spirit that is necessary for innovation and prosperity.

Barack Obama has amassed a dismal economic record as president. (Former senator Phil Gramm points out that if Barack Obama had matched Ronald Reagan’s post-recession recovery rate, 15.7 million more Americans would have jobs.) Obama can’t campaign on his record—so he’s betting his reelection chances on stoking embers of anger and resentment. That’s about all that’s left of hope and change.



Some more food for thought for The Donald

According to the typical liberal media narrative, those of us who have questioned President Obama's life documents are kooks. Nuts. Creeps. "Birthers." When Donald Trump raises issues with the birth certificate, members of the left, right, and center assume that he's doing so for political reasons and that there's no real story. They use the Old Jedi Mind Trick: "nothing to see here ... move along."

There's only one problem. There's something to see here.

There has been an enormous amount of misinformation with regard to Obama's life documents from well-meaning grassroots activists (some of whom are too trusting or inexperienced to know how to vet information properly) to media personalities (who are often sloppy and/or ignorant of the facts involved) to agenda-driven snake oil salesmen (who are using grassroots ire to fundraise or sell their books) to outright disinformation supplied by the Obama Administration itself. But just because there are many people who confuse the life documents issue doesn't mean there isn't one.

In fact, there are two.

For over two years, I have been privy to private investigators' files, have seen private investigations of other private investigations, have done my own research -- and I know beyond a shadow of a doubt that there are two crucial problems with President Obama's life documents. First, the registration number on Obama's "Certification of Live Birth" (which, as Trump recently explained to an incredulous Meredith Vieira, is not a long form birth certificate) is out of sequence to other birth certificates issued on the very next day in Hawaii to a pair of twins named Nordyke (certifications of live birth and birth certificates carry the same registration number).

Second, according to a private investigator, Susan Daniels, whose work was validated by at least two other investigators I'm aware of, the Social Security number that Obama used for approximately 25 years was issued with a Connecticut-based number, though neither Obama nor anyone in his family lived in that state at any point during their lifetimes. Bill O'Reilly claimed on his April 14, 2011, show that Obama's father, Barack Obama Sr., lived in Connecticut "for several years", but when I called O'Reilly for verification of his source(s), I was put into a voicemail and received no return call. As of this writing, it appears that O'Reilly's Mailbag Segment on Obama's Social Security number has been scrubbed by Fox News from the podcast of the show, along with some viewer mail on the subject.

Contrary to Mr. O'Reilly's claim and according to private investigations, after Obama Sr. left Hawaii, he lived in Cambridge, Mass, which he left for Africa in 1965. Obama Sr. never worked or took classes in Connecticut, and no one has ever proven or even given a reason for his living in that state. We know that 1977-79 was the period when Obama's Connecticut-based Social Security number was issued because private investigators have tracked down the dates when the Social Security numbers directly above and below Obama's number were issued. Both of these numbers were issued to Connecticut residents. But from 1972 until his death in a car crash in 1982, Barack Obama Sr. was in Kenya. During this period he was never in America. We reach this conclusion because Obama Sr.'s addresses have been tracked and can be seen in several private investigator data bases.

So it appears Obama Sr. had nothing to do with the application for Obama's Social Security number, as Mr. O'Reilly suggested. But then again, this is the same O'Reilly who also announced on his April 14th show that, although Obama's birth certificate has not been made public, Hawaii officials have it on file. This about-face conflicts with his 2008 statement that he'd actually seen the birth certificate and that's how he knows Obama is legitimate. "We have a copy of it," he said at the time. (NB: such a possession would have been illegal.)

Not only have these issues been ignored or derided by the press, any attempt to answer these questions has been stymied at the state level. Obscured by countless charges and counter-charges, and under the cover of stealth legislation, Hawaii has changed the law and the language with regard to the release of birth certificates, making it very difficult if not impossible to establish the veracity of any charges with regard to Obama's. One can only surmise that if fraud has indeed occurred, a cover-up of that fraud was the goal -- and accomplishment -- here.

But we need not allow state governments, or anyone, to cover up the Obama birth certificate conundrum. There is something we can do. We can ask states to adopt legislation that requires candidates to make public their long form birth certificates in order to be placed on the presidential ballot, and in accordance with Article 2, Section 1 of the Constitution. Arizona has already attempted something along these lines, but Arizona's law doesn't go far enough: it permits forensics testing only on secondary documents -- which is to say, if a long form birth certificate is not submitted, there will be no forensics testing on it. Instead, states must pass bills requiring forensics testing of any and all life documents submitted to them, if questions arise about them.

In order to push for such legislation, we all must shift into second gear. Instead of asking "where is the birth certificate?," we must now demand that whatever documents are released on a candidate's life, such documents must be subjected to forensic testing. Anyone who's concealed his documents (and hired lawyers to fight efforts in court to reveal his place of birth), as Mr. Obama has, appears not trustworthy; his actions alone demand forensics testing for any document he produces as proof of his "natural born" status. As Ronald Reagan famously put it, "Trust, but verify."

To date, no such total verification has taken place and thus secrets remain hidden. Instead, sloppy reporting and careless statements, including one made by the Republican National Committee (whom I also called to verify their sources and have received no return call), have been based on second-hand reporting rather than on investigative fact checking. And Obama has something to hide. If he didn't, Obama's attorney, Bob Bauer, would not be sending bullying letters to other attorneys promising sanctions, court costs, etc., if the birth certificate case were pursued against them (see threatening letter here). Obama wouldn't be spending money to defend against these lawsuits if there were no problems -- he'd be releasing his documentation pronto. For his trouble, Bob Bauer has been promoted to White House Counsel. Clearly, Obama's life documents -- which remain sealed from public view -- pose a problem for him, and the behavior of his inner circle proves it.

This is something that Mr. Trump seems to know instinctively. He has been unafraid in his pursuit of Obama's birth certificate. He has suggested an investigation of Hawaiian Governor Neil Abercrombie, who brashly promised that he would release Obama's birth certificate when he took office, only to say -- after having dug into the birth records -- that he didn't know he wasn't allowed to release such a thing. After Mr. Trump's perfectly reasonable suggestion, Abercrombie has been quiet.

Trump has stated that he has investigators on the ground in Hawaii checking on the birth certificate firsthand, and has stated that they "can't believe" what they are finding. Trump may understand that deception has already occurred here -- when Obama released his "Certification of Live Birth" in 2007 as if it were a valid birth certificate, it appears he meant to deceive the public. Trump's refusal to back off the birth certificate issue has the elites frowning, the base in an uproar, and Obama on his heels.

Meanwhile, the Republican establishment continues to shrink from the once-in-a-lifetime political opportunity Obama has handed them by his concealments. Frightened to attack Obama's "character," they instead insist on attacking his policies -- the same failed strategy that McCain (and they) have already tried. The Obama campaign and presidency, day after day, assassinated Bush's character (and now others) and lied continually, full of guile, about Obama's policies and political beliefs at the same time, and they continue this practice even today.

Why? Because it's effective. The vast majority of Americans already agree with Republicans on the major issues -- health care, "don't ask, don't tell," the stimulus package, the deficit -- policy arguments which Republicans have lost to Obama because they refuse to pull out the big guns. Were the Democrats thinking about beating Nixon on policy when they went after him on Watergate? The Republicans seem willing to allow Obama to waltz to a second term, unchallenged in this terribly important Constitutional issue, and Americans care deeply about their Constitution, simply out of spinelessness.

Trump has a spine, which is why he is gaining momentum and has pulled way ahead of the pack. Now we must convert that momentum into action. Instead of passing judgment about who is crazy or sane on the issues of the birth certificate and the Social Security number, we must ask Obama to show his hand, and we then must forensically test whatever he has, or he must fold. Forensics testing is not an outlandish idea; as distasteful as this analogy might be -- a sordid affair vs. a serious Constitutional issue -- forensics testing of a blue dress a few years ago revealed another set of lies of a young U.S. president, also attempting to defraud the public.

Because of the irregularities and unanswered questions outlined above, certainly the American people have a right to know whether the birth record that supposedly establishes the eligibility of their president is un-tampered with. And they also have a right to know whether the social security number that he has been using is genuinely his or stolen. Use of another person's social security number is a felony.

In the interests of full transparency and disclosure, in the interests of protecting the Constitution and the integrity of our elections, we need to force Obama and all other presidential candidates to show us their birth certificates before they join any presidential campaign and demonstrate they are eligible to serve us. Anything less is a deep betrayal of our most basic democratic ideals.




Hungary: Pols okay conservative constitution: "Hungarian lawmakers approved a socially and fiscally conservative new constitution yesterday that was blasted by rights groups and the political opposition for measures including a ban on gay marriage and protection of the life of a fetus from conception. Conservative Prime Minister Viktor Orban says the constitution will allow the former communist country to complete a transition to democracy and move to an era of sound finances and clean government after years of mismanagement"

Why we must freeze the debt limit: "A failure to increase the debt limit now would just create an ersatz 'crisis.' For too long, analysts and politicians have balked at the massive political impediments to reforming the federal budget — especially entitlement programs. Many now concede, actually, that no prudential reforms are likely unless there is an imminent 'crisis.' On the other hand, political liberals argue that there is no real 'crisis' — and so no need for real reforms. Well, here's the opportunity for a 'crisis' that 'should not be wasted.'"

Closing social distance: "Along with many of my fellow economists, I am drawn to the study of the nonmarket foundations of the market process. We find that examining the nature and significance of social capital, norms of trust and reciprocity, and conventions of fair play — combined with the traditional concerns of private property, the rule of law, and free trade — greatly improves our understanding of how social cooperation works or doesn’t work."

Welcome budget-cut talk: "Finally. A serious budget plan. House Budget Chairman Paul Ryan's proposal has the head-in-the-sand crowd horrified . A Washington Post columnist called it 'radical ... irresponsible ... extreme.' Ryan's plan offers some great things: less spending than President Obama wants; a path to a balanced budget; repeal of Obamacare; an end to corporate welfare. And it would make the social safety net sustainable rather than open-ended and going broke."

Are we allied to a corpse?: "The Post story about Britain and France, the leading military powers of NATO Europe, depleting their smart-bomb supply in a one-month clash with an African nation of 6 million, and begging the Yanks to come back and win the war for them, raises a major question. Is the most successful alliance in history, which kept the Red Army of Stalin, Khrushchev and Brezhnev from smashing through the Fulda Gap and reaching the Channel, a hollow shell?"


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)


Tuesday, April 19, 2011

The debt debacle and the destruction of U.S. dollar savings now underway

A near-worthless dollar is a real possibility -- unless drastic steps are taken

Martin Hutchinson comments:

Fiscally, it is now clear that the United States’ record has been uniquely profligate. According to IMF figures, the U.S. bank bailout has cost only 3.4% of GDP, compared with Germany’s 10.7% of GDP, yet the U.S. budget deficit for calendar 2011 is estimated at 10.9% of GDP compared to Germany’s 2.3%. (Given that the principal asset problem lay in U.S. housing, and that Germany had no comparable housing bubble, it can also be concluded that German banks were uniquely stupid!)

Outside the Civil War and World War II, the United States has never run deficits of anything like this size. The 1979-82 recession was comparable to this one in length and severity, yet the budget deficit peaked at 6.3% of GDP in 1983, by which time the U.S. economy was growing rapidly.

U.S. monetary policy has however been even more extreme than fiscal policy. The zero Federal Funds rate, prolonged now for 2½ years, is not as negative in real terms as short term rates became on a number of occasions in the 1970s. Yet the psychological effect of a zero nominal interest rate is incalculable. It prevents savers from receiving any return on their money, unlike in the 1970s when their nominal returns were quite substantial.

You can argue all you like that the more negative real returns of the 1970s represented easier money, yet the effect on savers of receiving no return on their savings, or on borrowers of having to pay almost nothing for their money is huge. Savings are depressed as simple folk give up altogether...

The effects of ultra-easy money are everywhere. Notoriously, it has reduced the U.S. savings rate close to zero, while shrinking capital cost differentials between the U.S. and emerging markets, thus effectively de-capitalizing the U.S. economy.

At this point, it is becoming clear that the period of “debt deflation” which Reinhart and Rogoff forecast would be needed before the U.S. and global economies could expand again on a healthy basis has been nothing of the kind.

Rather than deflation, we are currently experiencing a rapid increase in inflation. Each month’s statistics show an acceleration in the pace of inflation. Producer prices have been increasing at an annual rate of 10.9% over the last six months, which suggests pretty strongly that we shall soon see a similar rate of increase in consumer price statistics. However this time, unlike in the gentlemanly 1970s, the excessive expansionism of fiscal and monetary policy will prevent inflation from being halted at or just above the 10% level, but will instead produce inflation rates much higher than that.

In today’s world economy, the losers from an unexpected burst of inflation are not primarily the banks – fortunately for the world’s taxpayers, who would have to bail them out again. Instead the losers are the major investors in dollar debt – hedge funds, Middle Eastern potentates and Asian central banks. There could not be an economically less damaging collection of losers – except that Middle Eastern and Asian losers who have been scammed through wild dollar inflation and currency depreciation will find some doubtless unpleasant way of obtaining their revenge.

The blissful phase in which interest rates in the U.S. and elsewhere are far below the inflation rate will not however be long-lived, although doubtless a desperate Bernanke and his hangers-on will try and prolong it as far as possible. At some point, probably around the time reported inflation passes 20% per annum, the Treasury bond markets, the politicians and the public as a whole will panic, seeing the possibility of a Weimar-style collapse.

If this happens at an inconvenient point in the 2012 electoral cycle (or if the present incumbents are encouraged by unexpected electoral victory) little will be done and hyperinflation will set in. That would solve the debt problem, all right, but wipe out the U.S. capital base altogether.

Since the United States is, like Australia, a lucky country, it is however more probable than not that steps will be taken to avoid this ghastly fate. They will involve a Federal Funds rate that is far above the rapidly accelerating level of inflation – say 50% -- and long-term bond rates also above the inflation rate, at about 25% or so. Any benefit the U.S. government and individual borrowers had gained from the preceding inflation would be quickly wiped out, except for those thrifty souls who had prudently taken out fixed rate mortgages.

The U.S. government would be forced to cut back spending not by a third, as is currently necessary, but by more than half, financing the remaining deficit offshore in yen, renminbi and Singapore dollars, the currencies of the thrifty and provident Asians. The squeals of the electorate subjected to this usurious brutality would be deafening, but they would be drowned fairly quickly by the roar of job creation, as desperate companies scrambled to sell their cripplingly costly capital assets and reinvest in suddenly cheaper labor.

In the long run, the United States will probably arrive at the place predicted by Reinhart and Rogoff: a long-delayed recovery, with living standards depressed by the costs of eliminating debt. However it will have chosen a bizarre and excessively painful way of getting there.



Righteous Indignation: Andrew Breitbart is out to save the world (and he just might)

You won’t find too many people who are indifferent toward Andrew Breitbart. But love him or hate him, you can’t ignore him. With his ever-growing collection of “Big” websites (Big Government, Big Hollywood, Big Journalism and Big Peace so far), Andrew has redefined how the political right views and uses the Internet. He makes no apologies for his “in your face” style, nor should he. That style has won him many victories and many enemies. He seems to occupy the time of a disproportionate number of left-wingers, including many employees of the ultra-left-wing censorship factory called Media Matters. Those “senior fellows” are about to have their weekends ruined as Breitbart moves from the virtual world to the book world with today’s release of Righteous Indignation: Excuse Me While I Save the World (2011 Grand Central Publishing).

Righteous is three books in one, each self-contained. Together, they weave a narrative that will remind many readers of their own lives. Even if you don’t share all of Andrew’s political beliefs, you will find yourself identifying with at least some of his story and conclusions. The book is part biography, part history lesson, and part manifesto, and it flows with clarity of purpose from one page to the next. It subtly draws you into a narrative, strung through the whole book, where he meticulously makes the case against the media and pop culture, which, he argues, help spread and normalize the liberal agenda. He also explains how to combat that agenda.

The first third of the book reads like a biography, but with a purpose. He writes about his first foray into the Internet, a place that would eventually become his home, in a way most of us who were late adapters missed. He touches on his discovery of Matt Drudge and his working relationship with a then-conservative firebrand named Arianna Huffington. But “touches” is the right word — both of those relationships deserve a book of their own, but he has a different purpose in Righteous, and he doesn’t get distracted from it.

The second part of the book is a history lesson on the progressive/liberal movement in America. It’s not nearly as detailed as Jonah Goldberg’s amazing Liberal Fascism, but it doesn’t need to be, and doesn’t aspire to be. This isn’t a history book; it has a different mission.

Nevertheless, this section plainly and calmly lays out the basic facts of how the progressive left-wing agenda first came to these shores with the help of many establishment people such as the vaunted Edward R. Murrow. Breitbart tells the history of how the Frankfurt School spread their radical ideals throughout the country.

But Andrew’s real praise is reserved for radical Saul Alinsky. Breitbart loathes Alinsky’s ends, but the genius of his means is hard to dispute. The story of how this Chicago radical took the dry teachings of the Frankfurt School elites and sold it to the masses is often told as a cautionary tale, but Breitbart sees it as an opportunity, which leads perfectly to the final third of the book.

The last part of the book reads like a manifesto, a call to arms. So much of establishment Washington, and more specifically the conservative movement, is predicated on niceties. This “go along to get along” is perfect if all you want to do is get along. Andrew Breitbart does not want to get along, he wants to win.

The manifesto section stops short of inspiring the reader to pick up a pitchfork and a torch, but just barely. What it does do is inspire those of us who have been afraid to speak out about our deeply held beliefs for fear of rejection or attack. Breitbart lays it on the table. “It is not just a political war, it is a cultural war, and our audacious goal is to change the big narrative,” he writes.

Righteous isn’t meant to simply inform; it’s meant to inspire. Andrew tells the story of his first appearance on “Real Time with Bill Maher.” He thought he’d done well, until he started to hear from friends who wondered why he hadn’t stood up for his beliefs. He was much more assertive the next time he appeared on Maher’s show. Passivity only leads to appeasement. Sharp elbows are needed if victory is truly your goal.

Of all the things Righteous Indignation does, perhaps its most important function is to pull back the curtain on the unholy alliance between all the cultural and media institutions and the left-wing industrial complex and expose how they fit together like puzzle pieces to advance an agenda. If you trusted the media or the entertainment industry before reading this book, your eyes will be opened. If you didn’t, you will know you are not alone.



Sarah Palin rocks Madison

She was feisty. She was bold. And she was gutsy. At a Tea Party rally in Madison, Wis., on Saturday, Sarah Palin pulled no punches.

The former Alaska governor and 2008 vice-presidential candidate credited the Tea Party with winning “an electoral victory of historic proportions last November.” She praised Scott Walker’s efforts toward fiscal discipline. She stood up to the GOP establishment. And she had a strong message for Barack Obama as we approach 2012: “Mr. President, game on!”

Palin, who stems from “a family of schoolteachers,” reached out to Wisconsin’s union members: “I’m here today as a patriot, as a taxpayer, as a former union member, and as the wife of a union member … A pension is a promise that must be kept. Now your Governor, Scott Walker, understands this. He understands that states must be solvent in order to keep their promises. And that’s what he’s trying to do. He’s not trying to hurt union members. Hey, folks — he’s trying to save your jobs and your pensions.”

She talked tough with respect to the watered-down budget compromise reached by President Obama, John Boehner, and Harry Reid, affirming, “That is not courage. That’s capitulation.” She added, “Now there is a lesson here — in the Beltway politico, something that they need to understand — the lesson comes from here in Madison. So, our lesson is to the GOP establishment first … if you stand on the platform, if you stand by your pledges, we will stand with you. We will fight with you, GOP. We have your back. Together we will win because America will win.”

“We didn’t elect you just to re-arrange the deck chairs on a sinking Titanic,” Palin continued. “We didn’t elect you just to stand back and watch Obama redistribute those deck chairs. What we need is for you to stand up, GOP, and fight.” She added, “Maybe I should ask some of the Badger women’s hockey team — those champions — maybe I should ask them if we should be suggesting to GOP leaders, they need to learn how to fight like a girl!”

Palin called out President Obama on his unsuccessful stimulus, big-government promoting SOTU address, and proclivity toward ignoring the will of the people via Obamacare, reckless spending, and proposals for tax increases on the middle class and job creators. She challenged his tendency to “apologize for America while you bow and kowtow to our enemies and you snub our allies like Israel,” as well as the manner in which “you [Barack Obama] cut off oil development here and then you hypocritically praise foreign countries for their drilling.”

“We the people, we rose up, and we decisively rejected the Left’s big-government agenda,” Palin asserted. “We don’t want it. We can’t afford it. And we are unwilling to pay for it.”

Palin’s distinctive humor emerged through such statements as “We’re flat broke, but he [Barack Obama] thinks these solar shingles and really fast trains will magically save us” and “Win the Future? WTF is about right.”




Debt agency cuts US outlook to “negative”: "The Standard & Poor’s credit rating service Monday downgraded the U.S. sovereign long-term national debt from 'stable' to 'negative,' citing the failure of Congress to agree on a plan to 'reverse recent fiscal deterioration or address longer-term fiscal pressures.'"

NATO short on bombs, planes for Libya war: "Less than a month into the Libyan conflict, NATO is running short of precision bombs, highlighting the limitations of Britain, France and other European countries in sustaining even a relatively small military action over an extended period of time, according to senior NATO and U.S. officials. The shortage of European munitions, along with the limited number of aircraft available, has raised doubts among some officials about whether the United States can continue to avoid returning to the air campaign if Libyan leader Moammar Gadhafi hangs onto power for several more months."

Finland: Election could derail bailouts in Europe: "A huge surge in support for a Finnish nationalist party that opposes eurozone bailouts is complicating Europe’s plans to rescue Portugal and other debt-ridden economies. The sharp rise of the True Finns in Sunday’s nation election represents a watershed moment in Finnish politics, which have traditionally been dominated by the Social Democrats, the Center Party and the conservative National Coalition party."

TSA security looks at people who complain about … TSA security: "Arrogant complaining about airport security is one indicator TSA officers consider when looking for possible criminals and terrorists,when combined with other behavioral indicators, it could result in a traveler facing additional scrutiny."

Ryan’s way is the better way: "Medicare cannot simply continue to promise paying for everything for everyone when it doesn't have the money to do so. The question isn't whether future seniors will have to pay more or get less. It is whether those choices will be imposed on them from above or whether they will be empowered to make those decisions for themselves."

Public safety hypocrisy: "South Carolina is up against an $800 million budget shortage these days. State lawmakers there need to raise more cash. So they cooked up a bright idea to get it from small time speeders, caught driving less than 10 mph over the limits, who want to avoid DMV points on their drivers’ licenses. Here’s how it works: A low-level speeder would be pulled over by the cops and given the option of paying a normal $15 to $25 fine, to be reported to DMV for the assessment of points; or a $150 fine, which is 10 times the current minimum, but no report to the DMV, and no assessment of points."


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)

You can't fix stupid

How stupid is President Barack Hussein Obama? Let me count the ways.

Judging from the philosophical pose he struck during Wednesday's "debt-reduction" address, the president is so stupid as to believe that the "rugged individualism," "self-reliance" and "healthy skepticism of too much government" - all qualities he attributed to the American people in that speech - can survive in the shadow of his government.

During his two years in office, Mr. Obama has accrued more debt than any president in American history. Why, in the month of March alone, his souped-up civil servants spent eight times what they collected in tax receipts and revenues.

For every year their honcho has been in office, the Obama officials have devoured over a trillion dollars, and will put Americans in hock to the tune of $1 trillion in interest payments alone by the end of this decade, if not sooner.

How stupid is our president? So stupid as to believe that the governmental juggernaut over which he presides is what connects us as a nation, and ensures that "we . do together what we cannot do as well for ourselves."

How stupid is Obama? So stupid as to believe that America became a great country in 1935, which is when the earliest of the Medicare, Medicaid and Social Security entitlements was signed into law. Dummy did, after all, declare yesterday that, "We would not be a great country without [these programs]."

How stupid is the president of the United States? So stupid as to think that "the rich" are rich because their "country," by which he means the ruling clique, "has done so much for them," and that they must, therefore, be compelled "to give back a little bit more."

That's like claiming the tick created the dog! Production predates government predation. Government doesn't produce wealth - it only consumes riches created by others, Mr. President.

Besides, the individual is the basic unit of society, without whom there would be no collective. A cleverer man would know that ACORN is the creation of community agitators like himself, not the other way around.

Indeed, backward is our president for reasoning backwards. To wit, if B, then A: if "rich," then exploitative, but if poor, then exploited. That's a bad mistake.

Just how backward is Barack? Such an intellectual laggard is the country's commander in chief as to frame the massive spending he is directing as a "key investment in our future." The wherewithal for the largess exhibited by Mr. Obama's menagerie of moron has been siphoned off from the private economy (and from China).

How studiously dumb is our president? So stupid as to claim that the real "damage . caused to our nation's checkbook," a checking account he controls and we and our Chinese enablers keep in funds, is caused by tax cuts for the rich.

In other words, returning some stolen property ? that's what taxes are ? to its rightful owners is causing America to go under. That, and not the debt our overweening overlords have accumulated in the course of expanding their jurisdiction stateside and overseas.

A note to anyone who is as gormless as the president: Government is doomed to fail because it is bereft of the constraints private property imposes. The more funds funneled into an insolvent system, in which property is communally "owned" - the greater the squandering of these scarce, precious, appropriated resources.

Most of what the government currently does is financed by borrowing. President Obama spoke at length about his "vision for America." But if he must beg or steal to keep his vision alive, then there is something wrong with this "vision," and not with its victims.

But, as Ron White, that great satirist from the great state of Texas, teaches, "You can't fix stupid." "There is not a pill you can take, not a class you can go to. Stupid is forever."



US budget "showdown"

For all the attempts to talk up the budget clash as a great historical drama, in truth it revealed the pathetic state of American politics. It looked like money for US government agencies would run out at midnight. But an hour before that deadline, congressional leaders and President Obama reached a budget deal that prevented a government shutdown and massive job lay-offs. The compromise cuts about $39 billion from federal spending this year.

Listening to the media coverage, it seemed like a great political drama was taking place. CNN showed a countdown clock, with the minutes ticking away ominously towards the shutdown at midnight. In reality, though, the whole thing was an example of the pathetic state of American politics. The Financial Times was right to refer to the shambolic last-minute deal-making as 'banana republic machinations'.

Despite what the breathless news reporters said, this was not a battle over political principle. Yes, the US federal deficit is large, but this agreement was never intended to put even a small dent in it. Both parties had agreed to reduce spending, and the differences between them towards the end had boiled down to $1 billion or $2 billion, out of a total budget of $3,700 billion.

Following the deal, a beaming Obama said: 'Today, Americans of different beliefs came together.' Based on his enthusiasm, you could be forgiven for thinking that the agreement marked a landmark in American history. Of course it was simply the mundane business of government: passing a budget, something the federal government does every year. Not only that, but amid all the celebrations it is easy to miss the fact that the budget deal was well overdue, coming some six months into the fiscal year, and therefore this supposedly great achievement only sees them through another six months.

Rather than getting caught up in the 'high-stakes drama' of the 'countdown to shutdown', most Americans watched with bemusement and dismay. How could such a serious step - shutting down the basic institution of government, with significant implications for jobs and services - be risked when there was so little separating the two sides? The reality was that the brinkmanship was intended to sway both parties' respective members of Congress, not the public at large. John Boehner, Republican majority leader in the House, wanted to prove to his Tea Party caucus that he was going down to the wire to obtain the maximum spending concessions; Harry Reid, Democrat majority leader in the Senate, wanted to cover his tracks by reassuring his liberal wing that he was not going to give in to Republican social policy issues, like the bid to defund Planned Parenthood.

That the politicians would subject the public to such a circus, just to bring their own members in line, shows how self-absorbed they are. Before the budget showdown, both parties in Congress were held in low esteem, with approval ratings of less than 20 per cent. The latest spectacle of politicians acting like juveniles will certainly not improve perceptions of Congress's stature.

Of the two parties, the Republicans retained some semblance of coherence. Mostly united behind a push for spending cuts, they managed to set the agenda. But for all of Boehner's self-congratulation afterwards, the cuts represented only a tiny percentage of the total budget. At the same time, because they were heavily focused on so-called 'discretionary' welfare spending, the reductions will disproportionately affect the poor and working class. In addition, the Republicans' pursuit of issues that had nothing to do with the budget - like the ban on the financing of abortions in Washington, DC - made it appear that they were simply using the occasion to advance their pet project

The most ludicrous of Boehner's claims was that the deal would help the economy. 'We fought to keep government spending down because it really will in fact help create a better environment for job creators in our country', he said. To date, businesses have not been holding back from hiring more because of government spending, and the relatively small cuts in the latest budget deal will have little or no influence on whether to create more jobs. While the Republicans are obsessed with cuts, they have no answer for economic growth; and if the economy doesn't grow, even cuts in spending won't come fast enough to reduce the deficit.

On the other side, the Democrats appear aimless and adrift. The fact that the 2011 budget took this long is a poor reflection on them: they had majorities in both Houses of Congress when this process should have been completed six months ago, so they only have themselves to blame for failing to come to agreement within their own party.

It is hard to know where Obama stands on these issues. At times he calls for 'investments in the future', but he also stresses that cuts are necessary, using the analogy of a family tightening its belt when times are tough. His initially proposed budget called for a $40 billion increase in spending, and then he ended up agreeing to a $39 billion decrease - a swing of $79 billion. To an objective observer, that would appear to be a defeat. And yet afterwards Obama pretended he had won. He called the deal 'good news for the American people' and boasted about 'making the largest annual spending cut in our history'.

What is clear coming out of the budget agreement is that the Democrats are allowing the Republicans to set the agenda. No longer is there any talk about stimulus, even though Obama previously said the stimulus would be necessary until the economy fully recovered and unemployment came down to pre-recession levels. (Indeed, most economists think the US economy is not out of the woods, and have marked down growth forecasts as a result of the budget deal, because the economy has been so reliant on state spending.) Nor is anyone really talking seriously about Obama's 'investments', like his half-hearted proposals to increase spending on infrastructure, high-speed rail and green-energy technology.

Instead, all the talk is about where to cut next. Obama and the Democrats have managed an incredible feat: they have made the Republican scaremongering bean-counters appear like courageous truth-tellers who are willing to tackle unsustainable deficits.

It now looks like there will be other occasions for 'drama' in the near future. First, there will be a vote on raising the national debt limit, which will probably occur sometime between mid-May and early July. Boehner is insisting that they will go down to the wire again unless 'there is something really, really big attached' to raising the cap - meaning further spending cuts. The White House is warning that not raising the debt limit would have 'Armageddon-like' consequences for the economy.

Second, a debate has started about the 2012 budget. Last week, Republican Paul Ryan unveiled the House proposal, and on Wednesday night Obama is expected to announce his counter-proposal. The 2012 process looks likely to drag on like the 2011 did, especially given that neither party will want to be seen to be conceding too much in the run-up to the 2012 election (which is a presidential one).

While disagreeing on the means, it is clear that both parties agree on the end: austerity. Even though the costs of Social Security and Medicare are structural contributors to government deficits, a focus on them (and deficits generally) is myopic. At the moment, there is no fiscal crisis. The real issue that is neglected amid all the deficit discussion is whether the US economy can generate growth. With growth, the current deficits will be taken care of; without growth, the doomsday scenario that fearmongers peddle today could become a self-fulfilling prophecy.

Neither major party has anything of substance to say about creating growth in productive industries. Their consensus on austerity is mind-numbing and uninspiring. To be subjected to the spectacle of recurring pantomimes over budgets only adds insult to injury.




A cancerous government: "Cancer cells grow and multiply like normal human tissue cells, but unlike normal cells, cancer cells suck up body resources without doing anything beneficial for the body. They eventually kill the body. The abnormal growth of government and government spending does exactly the same to civilizations. In the United States, government growth and spending has multiplied to the point where the draw down on productive contributors is starting to kill the host. There is little incentive to contribute values in the market place when the federal, state, and local governments are taking more than 50% of a taxpayer's income in many instances. Why work hard to create if the value will be confiscated?

AZ: Bill requires candidates to prove birth in US: "Arizona, which has shown little reluctance in bucking the federal government, is again plowing controversial ground, this time as its Legislature passed a bill to require President Obama and other presidential candidates to prove they were born in the United States before their names can appear on the state's ballot. If Governor Jan Brewer signs the proposal into law, Arizona would be the first state to pass such a requirement - potentially forcing a court to decide whether the president's birth certificate is enough to prove he can legally run for reelection. Hawaii officials have certified Obama was born in that state, but so-called birthers have demanded more proof"

Senate "Gang of Six" seeks accord on debt: "Days after President Obama called for forming a bipartisan group in Congress to begin negotiating a $4 trillion debt-reduction package, the parties have not even agreed to its membership. Yet six senators - three Democrats, three Republicans - say they are nearing consensus on just such a plan. Whether the so-called Gang of Six can actually deliver something when Congress returns from a recess in May could determine whether Democrats and Republicans can come together to resolve the nation's fiscal problems before the 2012 elections."

Obama tries to obstruct executions: "President Obama well may have begun another undeclared war -- this time on states that try to enforce their own death penalty laws -- on the dubious grounds that the Food and Drug Administration has not approved drugs intended to kill convicted killers. On March 15, the Drug Enforcement Administration seized Georgia's supply of sodium thiopental, the first drug given under the three-drug lethal injection protocol used in most of the country's 34 death-penalty states. The DEA also asked Kentucky and Tennessee for their sodium thiopental to aid its investigation."

The richer we get the more markets we need: "We can regard economic gr[ow]th as coming in two forms. There's catch up growth, such as what China is doing now and Japan did 50 years ago. What to do is largely known, for there are the examples of the richer, more advanced, economies that can be followed. ... However, once a place has got rich the problem changes. Catch up growth is no longer possible, for there's no one to catch up with. The economy has arrived at the technological frontier so there's no one to copy. Any further growth is going to come from innovation, new ways of doing things, rather than mobilising extant resources to simply do more. At which point governments can't do that planning and directing thing"

There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)