Archive for April, 2010
Philosophical Ramblings
Posted by Tom in Constitution, Individual Freedom, Law, Morality & Religion in the Public Square, National Character, Taxation, Welfare on April 22, 2010
Saw one of my favorite Docs today and told him of the dismal projections for our country discussed at this week’s Reno Hayek Symposium Dinner, the current and future deficits, the debt, the unfunded liabilities and on top of all this the Omamacare sludge hammer. We both pondered the “no way out-no apparent solution” future. The concern here is for our children and grandchildren. And, its not that they can’t be better, be more independent than we, but that we are saddling them with unimaginable debt burdens so bad that they can’t be overcome no matter how strong they are.
We then discussed the untenable tax burden necessary to barely maintain but not reduce these entitlements, their corresponding debt and merely the interest cost necessary to maintain both. This is not a tax the rich issue, the rich will no longer be here or anywhere for that matter. This is a gigantic burden on the middle class; the less-than-middle class pay no taxes, and in fact have payments going to them. The anticipated 20% VAT tax atop the increased income tax and estate tax will not come close to solving the problem. In fact this tax on consumption will merely accelerate the downward spiral in our consumption based economy. This because consumers will be further forced to hunker down, down to a subsistance existence.
We pondered the all-but-impossible solution of reducing entitlements arguing its necessity but also its political impossibility. Then we broached the real issue, equality.
This, discussed initially in medical services. Should we all be entitled to the best, the Mayo clinic, the latest technology? Or should only those who can afford the best be able to buy it? In Europe it is the entitlement scenario, but the best becomes the non-best. This because the best requires capital investment at risk for long duration and problematic results. My Doc pointed out that med-tech investment is down! In Central America medical treatment and services are pretty good and the tech used is state-of-art but only for those who can afford it. The lower classes are relagated to a lower level of care above first aid but not the best available.
What as a society do we want for our society? What as a society can we afford for our society?
I think it gets down to two issues: the proper role of government and the moral responsibility of the individual. Government must defend our shores first and formost. It must enforce criminal laws protecting person and property. It must maintain a system of civil justice resolving disputes between citizens. And given our republic structure it must resolve issues between states. Finally it must provide for its continuance, succession and amendment. Our founding fathers pretty well set this out initially in the Declaration of Independence and later in the Constitution.
I think the proper role of the individual is to provide for himself and his family; that is food, shelter, education and protection. Beyond that the individual must be a contributing member of society helping his fellow man in need. This frequently through synagogue, temple or church and also through voluntary community societies. The individual must also be a responsible citizen, voting, volunteering, and participating in government offices when elected or appointed.
What of equality? What of entitlements? We are not “all created equal” nor has history shown us to be “endowed by our Creator, with certain unalienable rights” of life, liberty and the pursuit of happiness. The closest we come is to expect “equality of opportunity” despite our limitations. “Equality of result” is never attainable. Nor are we “entitled” to be equal. We struggle to do our best for ourselves, our families and our society. But we are not entitled to nor should we be guaranteed the same as everyone else.
This realization gives us the opportunity to help others, to be charitable, to do moral good. Including providing charitable hospitals and medical care, to get back to the earlier example. Here the government has no role; it is the exclusive role of the individual with other individuals alongside.
So, to prevent or at least mitigate the greatest intergenerational immorality in our history, we must limit entitlements, reducing and means restricting social security, medicare, medicaid and Obamacare. Keep in mind our grandkids have no voice, they are innocent of our current theft of their future. Our parents, the greatest generation, left us a better future but perhaps one too soft. Will we do worse by our children and grandchildren?
Monthly Reno Hayek Symposium Dinner
Posted by Tom in Deficit, Economics, Financial Crisis, Financial Policy, Symposium Notes on April 21, 2010
Last evenings Symposium Dinner was a double-header first with an excellent presentation by Howard Fletcher whom Bob Skach sponsored for the dinner. Howard brought his extensive credentials in international business to bear in discussing the current economy from a big picture, 50,000 foot perspective. Detailed statistics backed up the main lesson, that our over leverage, over consumption, and under savings caused this “balance sheet” recession. Different from an “inventory” recession because it is caused by inflated values yet constant high debt levels, while the inventory recession is a simple temporary unbalance of supply and demand. The problem here is the lingering nature of the downturn and slow recovery, in this case exacerbated by government mistakes. (What’s new!) Again in this case given the multiple deficit levels, concomitant debt and horrendous unfunded liabilities at all government levels the future is dire short and near term. But Howard does forecast a start-stop recovery in the second half of the decade.
Our second speaker, Tom Cargill presented his provocative thoughts on the Fed’s anticipated exit from its unprecedented free money policy. This both in terms of zero interest rates and historic, dramatic expansion of money supply (M2). The $12 Trillion of deficits and debt was shockingly illustrated with Federal Reserve graphs. Tom made the point that the political pressure to keep the status quo will not abate. Next, the so-called “independence” of the Fed is ofttimes illusory in face of that pressure. Thus the only issue is the Fed’s political will to use its ample tools to start removing the punchbowl from the party.
After the presentations those in attendance undertook a lively exchange which was at times very telling, at least in the sense that each participant knew what the conclusions were. We face a dismal immediate future. Leaders from both parties tend to get bit by Potomac fever and avoid proper but hard decisions. There is a good chance of a revolution in the two upcoming election cycles as a strong majority of the electorate resent big government. The role of the government is the issue. Given agreement that it is too all-consuming, the question is how to effectively keep restricting and diminishing it.
I want to thank Howard and Tom for a thought provoking evening and great fodder for future discussions.
O’Driscoll’s Shot at Crony Capitalism
Posted by Tom in Economics, Financial Policy, Government Regulation on April 19, 2010
Our own Jerry O’Driscoll has in his April 20 WSJ article given an economist’s perspective on “crony capitalism,” An Economy of Liars. He argues that the current “reform bill” simply multiplies regulations in a failed regulatory environment. One reason for the failure is the incestuous relationships between regulator and regulated. Examples of regulatory failure abound. Causes are more subtle. Jerry argues for a more common law approach, an affirmatively duty to correctly represent. Let the free market and its pricing mechanism work. His article linked above is well worth the read.
Wall Street + Democrats = Crony Capitalism at Taxpayer Expense
Posted by Tom in Centrally Managed Economy, Deficit, Democrats, Economics, Financial Policy, Government Regulation, Unions, Wall Street, Welfare on April 18, 2010
In 2008 to elect, inter alia, Barack Hussein Obama and other Democrats, Goldman Sachs contributed $4,463,788; that’s 75% of its total contributions to the Democrats, the party of Wall Street. Also the party of public employee unions and unions in general. Also the party of trial lawyers. These three groups together with sundry “rent seeking” corporations like GE have cost the U.S. economy, particularly the taxpayers, billions of dollars. A little money buys a lot from Democratic whores like financial perks to Goldman from selling structured phony investments, more government employment union dues for union bosses, and contingency fees for trial lawyers from phony lawsuits. The economic cost hurts us in inflated deficits and debt, higher capital costs and exploding taxes and higher medical costs from inflated malpractice insurance rates.
The Wall Street payoff continues with Sen. Dodd’s financial ”reform” package. It is a bailout at taxpayer expense waiting to happen. With Obama and Democratic lips moving in support of the Dodd security blanket for Wall Street you know the denial of future bailouts is bold face lie. What Dodd has done is to institutionalize future bailouts garnering more power to the federal (DEMOCRATIC) regulators. Just another step in big government. Just another money getting lever for the Democrats. Just another vote buying lever for the leftists.
The problem is twofold and all bad: One: More control of the economy, main street as well as big business, because the general economy works with the financial lubricants provided by the financial industry. More control means bigger government. More control means more opportunity for rent seeking behavior and less competition. More control means more incumbent power.
(Definition: rent seeking behavior is the business behavior to obtain unfair competitive advantage from government regulation, subsidy, or taxation against competition without such advantage. Examples: subsidy of environmental devices, ethanol, and government bond agency.)
Two: Just as bad from an overall economic perspective is the moral hazard enshrined in the Dodd bill. Moral hazard is the real or imagined sense that there is a safety net protecting business from adverse risk. If I feel the government will always be there to bail me out, I will take more and more undue risk to gain greater profit because I have nothing or little to lose in the process. This is a guaranteed bubble generator and when the s__t hits the fan, the necessary cleanup will fall on the taxpayer. Fannie and Freddie are perfect examples of this phenomena.
As a recent WSJ editorial notes the Dodd bill is improving draft by draft at a glacial pace so we still have hope. But the mindset of the Obama control freaks is opposite the welfare of the American people.The solution is to separate high risk businesses like proprietary trading from government guarantee businesses like bank deposits or alternatively, eliminate all government business guarantees. We must have the freedom to fail as well as succeed without government interference in either case. That is what makes us competitive and what has made us great.
Welfare be it individual or corporate only makes us dependent in a world that will not tolerate dependence. It puts us near the end of the road to serfdom.
Hussein Obama Is Anti-semitic
Posted by Tom in Defense, Foreign Policy, Military Policy on April 16, 2010
Investors Business Daily editorializes on Obama’s bullying of Israel today in a convincing piece, Israel Or Terrorists. “Are we Israel’s staunch ally? Or, do we blame the Jewish state for Islamist violence? An increasingly anti-Israel U.S. government cannot have it both ways.”
The article goes on to show Obama’s attempt to make the West Bank and Gaza the equivalent of the Nazis’ Buchenwald. A grossly false comparison, which unfortunately our president is wont to do.
But the real punch is the stupidity of the Obama policy. Instead of returning the Mideast to a Garden of Eden, a Palestinian settlement would only embolden terrorists to push harder for a Sharia world.
Again, our Neville Chamberlain president shows his true bias. He is anti-semitic.
Sandoval Has All Guinn’s RINO Markings
I was unable to make Elizabeth Crum’s bloggers conference with Brian Sandoval, a Republican candidate for governor, the other day, but Chuck Muth presents a pretty good account of the pertinent points. As you would guess these reflect back to Guinn v. Legislature, the largest blight on constitutional government in Nevada and perhaps the US. It made our state the laughing stock in the WSJ editorial page. Then Brian didn’t believe in separation of powers; he like Guinn believed in tax and spend, in that case a gross receipts tax. Now I came to Nevada from Washington and can tell you how bad a gross receipts tax is. I fought it at that time and it did not come into being. But that’s not for the RINOS not trying.
Chuck Muth’s article points out that nothing has changed for Sandoval, he’s still a tax and spend RINO. He has been given several chances to repudiate the position, he refuses. He’s ambitious, young, charismatic and leans left. Remind you of anyone in Washington?
Chuck’s article, Beware of Sandovals in Conservative Clothing, is worth the read. Thanks again to Elizabeth Crum of Nevada News & Views.
Obama: the “peace in our times” president
Posted by Tom in Defense, Foreign Policy, Military Policy, Terrorism on April 14, 2010
Like a broadway scripted play Obama is into his foreign policy-defense act. (This, the act that follows Obamacare!) It is, to paraphrase Shakespeare’s Macbeth, a policy “Told by an idiot, full of sound and fury, signifying nothing.” (Act 5, Scene 5)
No, that is to naive but not too harsh. As I think Clifford May’s tax day NRO post, The Obama Doctrine, points out well, Obama has showcased his photo-op national security initiatives: the Nuclear Posture Review (NPR), a new Strategic Arms Reduction Treaty (STARTT), new National Security Strategy (NSS) and his international Nuclear Security Summit with 40 heads of state.
- STARTT: Reduce US/Russian nukes by 30% for good example to others. “That’s a lovely vision, but which do you think is more likely: that rogue regimes will see these reductions as virtuous and emulate them? Or that they will see these reductions as an opportunity and exploit them?”
- NSS: We pledge not to use nukes against non-nuclear nations. But we fail to define our non-nation enemies. Obama strips terms like “islamic extremism” from the document for fear of offending! We’re back to “man-caused disasters” and “overseas contingency operations.” ” Imagine if President Roosevelt had decided not to speak about German Nazism, lest he offend Germans who were not Nazis, nor utter the words “Italian Fascism” since not all Italians were of the Fascist persuasion, and of course refrained from mentioning Japanese militarism . . . you get the idea.”
- Obama’s Nuclear Security Summit made little progress on cleaning up “loose nukes” and ignored Iran and North Korea.
- NPR: Obama will not modernize our nuclear weapons nor will he use nukes against enemy attacks against us with chemical or biological weapons. In other words, deterrence is a thing of the past. The policy will “actually provide our adversaries with an incentive to accelerate development of offensive capabilities. They clearly do nothing to strengthen deterrence.” Deterrence is what has kept us safe since 1945. The concept that attacks on us or our allies will not bring measured response but extreme, disproportionate devastation is what prevented such attacks. In this regard, Obama is the equivalent of the Russian in Dr. Strangelove who kept the doomsday machine secret, Obama wants to eliminate deterrence–really dumb!
Finally, our own Neville Chamberlain has decided to eliminate necessary missile-defense! “President Obama has scrapped a missile-defense system for eastern Europe, cut the number of planned deployed ground-based interceptors in Alaska and California from 44 to 30 (these provide the only protection to the U.S. homeland against long-range ballistic missiles), cut $1.5 billion from the missile-defense budget (then, curiously, restored about $600 million), and nominated a missile-defense opponent, Philip Coyle, as his top missile-defense adviser.”
In sum, the “Obama Doctrine” postures against non-existant threats, fails to treat real threats, and removes and reduces our defense capability. He’s an articulate empty-suit and a danger to our security.
Objection From Drunken Sailor
This from my friend Gary Pestello:
Says it all! But unsaid and particularly commendable, the refusal of the banks to extend credit to the drunken sailors. And this, perhaps because there are no government guarantees or subsidies from the Obama administration for those loans!
The market place and common sense would work well if the leftists would only give them a chance!
Tax Season–Players Suckers–Spectators Vote
Mark Steyn’s NRO post today, Tax Season, analogizes tax season to baseball season which, for most of us, is a spectator sport. Yeah, that’s right, we pay at the gate and again for the peanuts and crackerjacks while the guys on the field play and get paid. That’s the opposite of Mark’s analogy. During tax season, the taxpaying-players pay, and the spectators in the stands get in free and enjoy free peanuts and crackerjacks. No wonder they don’t care if they “never get back. Cause it’s root, root for the” Obama team. “If they don’t win, it’s a shame.” Here my choice of Jack Norworth’s 1908 baseball standard as an analogy breaks down. It’s highly improbable, almost impossible that “they” won’t win. Why? Cause like baseball now, the spectators will shortly outnumber the taxpaying players. Thus, the point of Mark’s article.
“And yet for an increasing number of Americans, tax season is like baseball season: It’s a spectator sport. According to the Tax Policy Center, for the year 2009, 47 percent of U.S. households will pay no federal income tax. Obviously, many of them pay other kinds of taxes — state tax, property tax, cigarette tax. But at a time of massive increases in federal spending, half the country is effectively making no contribution to it, whether it’s national defense or vital stimulus funding to pump monkeys in North Carolina full of cocaine (true, seriously, but don’t ask me why). Half a decade back, it was just under 40 percent who paid no federal income tax; now it’s just under 50 percent. By 2012, America could be holding the first federal election in which a majority of the population will be able to vote themselves more government lollipops paid for by the ever shrinking minority of the population still dumb enough to be net contributors to the federal treasury. In less than a quarter-millennium, the American Revolution will have evolved from “No taxation without representation” to representation without taxation. We have bigger government, bigger bureaucracy, bigger spending, bigger deficits, and bigger debt, and yet an ever smaller proportion of citizens paying for it.”
“The top 5 percent of taxpayers contribute 60 percent of revenue. The top 10 percent provide 75 percent. Another 40-odd percent make up the rest. And half are exempt. This isn’t redistribution — a “leveling” to address the “maldistribution” of income, as Sen. Max Baucus (D., Kleptocristan) put it the other day. It isn’t even “spreading the wealth around,” as then-senator Obama put it in an unfortunate off-the-prompter moment during the 2008 campaign. Rather, it’s an assault on the moral legitimacy of the system. If you accept the principle of a tax on income, it might seem reasonable to exclude the very poor from having to contribute to it. But in no meaningful sense of the term can half the country be considered “poor.”
Two Points: One, if you don’t pay for it, you don’t appreciate it. The dole, the negative tax, the entitlements exacerbate an entitlement/dependency mentality that only wants and demands more and really doesn’t appreciate what is given with any contribution!
Two: The percentage of taxpayers supporting the system will decline and decline more, until it wakes up and leaves. We have reached the “tipping point” in social security with more going out than coming in. Medicare is worse, as is Medicaid, the states unfunded liabilities and government debt, deficits and unfunded liabilities follow in order.
That the idiot we have as president, Obama, with his leftist minions, Pelosi and Reid, and the Democratic congress have added Obamacare as another gigantic entitlement to this unsustainable pyramid is immoral now and all the more so later. Obama has proven himself anti-life as that term applies to live birth abortions; he has now done so as to our precious grandchildren now living.
The sad truth that Mark Steyn makes is that there are going to be more voters voting themselves free “peanuts and crackerjacks” than taxpayers paying for everything!
