Monday, November 30, 2009

Weekly Political Humor

Having been exposed for engaging in a pervasive pattern of scientific fraud, this his has not been a good couple of days from the global warming alarmists. So this is a perfect time to add some insult to their injury, and a group of Minnesotans (I think that's what they're called?) have put together a very funny Christmas video:

What If We Had Government-Run Restaurants?

Here's a very clever video from the Ladies4Liberty. It's funny, but the lesson about what will happen to our healthcare system is deadly serious.

Federal Reserve Chairman Wants Central Bank to Be Rewarded for a Crummy Job

We've all heard the joke about the guy who gets convicted of murdering his parents and then asks a judge for mercy because he's an orphan. That same kind of chutzpah was displayed in a recent column by Fed Chairman Ben Bernanke is the Washington Post. In an attempt to preserve some of the Fed's regulator powers (which are not necessary for, and may be harmful to, the central bank's ostensible mission of price stability) and dodge accountability and oversight, Bernanke warns that, "These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States. The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation." These two sentences would be laughable if it wasn't for the fact that Fed policy mistakes have caused so much misery. At the risk of stating the obvious, the Fed's easy-money policy was the main reason for the financial crisis. Bernanke's argument is akin to an arsonist expecting praise for calling the fire department after setting a house on fire. But Bob Higgs, the highly-regarded economic historian, had the best analysis:

And about this “economic and financial stability in the United States” that a Fed audit would threaten: Is Bernanke thinking about the stability we enjoyed between the world wars, when the Fed managed to bring about the onset on what proved to be the greatest depression in world history (an accomplishment for which he has previously accepted responsibility on behalf of the Fed)? Or perhaps he is thinking instead about the stability we enjoyed since 2001, when the Fed pushed the Fed funds rate quickly from 6.5 percent to 1 percent, held it at a negative real rate for several years, then pushed it up quickly to 5.25 percent in 2006-2007, then shoved it down quickly to almost zero in the past year? Zounds. It would certainly be tragic if the American people had to give up such remarkable stability. Or perhaps he is thinking about the fact that before the Fed was created, the dollar had retained its purchasing power more or less constant for more than a century, except for transitory war-related ups and downs, but since the Fed’s creation, the dollar has lost more than 95 percent of its purchasing power. Who calls this degree of debasement stability?

Sunday, November 29, 2009

So-Called Stimulus Leads to More Fraud

Here's a dog-bites-man story. Politicians in Washington decide to squander $787 billion of other people's money, and it turns out that a lot of the money is being diverted by crooks. USA Today reports:

Federal prosecutors are investigating a dozen cases of possible fraud involving the $787 billion economic stimulus package, a USA TODAY review of government records shows. There are an additional 88 active investigations of potential misuse of that money, according to reports filed by internal watchdogs at 29 federal agencies managing stimulus funds and the congressional Government Accountability Office. Separately, GAO criminal investigators are reviewing nine cases, acting GAO head Gene Dodaro has said. ...Recovery Accountability and Transparency Board Chairman Earl Devaney said the allegations involve contract and grant fraud and include filing false statements and attempts by ineligible firms to get funding. "This is a pretty tempting pot of money for people to go after," Devaney said of stimulus funds.

Pat Buchanan Nails the Government Education Monopoly

Even though Pat Buchanan sometimes veers into big-government populism and has odd theories on things such as World War II, I've always had a soft spot in my heart for him - perhaps because he featured one of my Wall Street Journal opeds in a 1992 campaign commercial when he challenged President George H.W. Bush. But he's also a crisp writer, and his Townhall.com column on education is right on the mark:

As George W. Bush famously asked, "Is our children learning?" Apparently not in the twin capitals of liberalism, D.C. and New York. In a ranking of 50 states and D.C. by how much each spent per pupil in public schools in 2005, New York ranked first; D.C. third. The state spent $14,100, and New York City just a tad less. And the bountiful fruits of this massive transfer of taxpayers' wealth? In D.C., nearly half of all black and Latino students drop out. Of those who graduate, nearly half are reading and doing math at seventh-, eighth- and ninth-grade levels. D.C. academic achievement ranks 51st, last in the U.S. Yet last week came a report from New York that makes D.C look like M.I.T. Some 200 students, in their first math class at City University of New York, were tested on their basic math skills. Ninety percent could not do basic algebra. One-third could not convert a decimal into a fraction. ...As 70 percent of all CUNY students are graduates of city schools, a question arises: What are the taxpayers of New York getting for the highest tax rates in the nation? If a private business annually turned out products that were of inferior quality than the year before, management would be thrown out by the board. Yet, the education racket has been shaking us down for four decades, and turning out graduates that know less and less. Scholastic Aptitude Test scores peaked around 1964. Ever since, the national average has been in an almost unbroken descent. So embarrassing did it get that, a few years ago, the SAT folks retooled the test to produce higher scores.

Saturday, November 28, 2009

Truth, Justice, and the Bulldog Way

I don't get it. How can Georgia lose at home to an unranked Kentucky team, but then beat #7 Georgia Tech on the road the following weekend? Just a rhetorical question, of course, but it sure felt nice. Georgia 30 - Tech 24!

Wallison Rips White House Scheme to Control Financial Sector

Peter Wallison of the American Enterprise Institute has been one of the few sane voices in the fight over bailouts, regulation, and the financial sector. His new column in the Wall Street Journal exposes the White House's misleading arguments for more government control of an already over-regulated financial sector:

...the government's case for bailing out AIG has rested on the notion that the company was too big to fail. If AIG hadn't been rescued, the argument goes, its credit default swap (CDS) obligations would have caused huge losses to its counterparties—and thus provoked a financial collapse. ...The truth about the credit default swaps came out last week in a report by TARP Special Inspector General Neil Barofsky. It says that Treasury Secretary Tim Geithner, then president of the New York Federal Reserve Bank, did not believe that the financial condition of AIG's credit default swap counterparties was "a relevant factor" in the decision to bail out the company. ...The broader question is whether the entire regulatory regime proposed by the administration, and now being pushed through Congress by Rep. Barney Frank and Sen. Chris Dodd, is based on a faulty premise. ...The administration's unwillingness or inability to clearly define the problem of interconnectedness is not the only weakness in its rationale for imposing a whole new regulatory regime on the financial system. Another example is the claim—made by Mr. Geithner and President Obama himself—that predatory lending by mortgage brokers was one of the causes of the financial crisis. ...At the end of 2008, there were about 26 million subprime and other nonprime mortgages in our financial system. Two-thirds of these mortgages were on the balance sheets of the Federal Housing Administration, Fannie Mae and Freddie Mac, and the four largest U.S. banks. The banks were required to make these loans in order to gain approval from the Fed and other regulators for mergers and expansions.

Friday, November 27, 2009

Defending Obama...Again

I caught a lot of flack from my Republican friends for my post blaming the FY2009 deficit on Bush instead of Obama. Well, I must be a glutton for punishment because I can't resist jumping (albeit reluctantly) to Obama's defense again. Foxnews.com posted a story headlined "Obama Shatters Spending Record for First-Year Presidents" and noted that:

President Obama has shattered the budget record for first-year presidents -- spending nearly double what his predecessor did when he came into office and far exceeding the first-year tabs for any other U.S. president in history. In fiscal 2009 the federal government spent $3.52 trillion ...That fiscal year covered the last three-and-a-half months of George W. Bush's term and the first eight-and-a-half months of Obama's.
This story was featured on the Drudge Report, so it has received a lot of attention. I'm a big fan of criticizing Obama's profligacy, but I don't think it is right to blame him for Bush's mistakes. At the risk of repeating my earlier post, the 2009 fiscal year began on October 1, 2008, and the vast majority of the spending for that year was the result of Bush Administration policies. Yes, Obama did add to the waste with the so-called stimulus, the omnibus appropriation, the CHIP bill, and the cash-for-clunkers nonsense, but as the chart illustrates, these boondoggles only amounted to just a tiny percentage of the FY2009 total - about $140 billion out of a $3.5 trillion budget (supplemental defense spending could boost Obama's share by another $25 billion, but Bush surely would have asked for at least that much extra spending, so individual readers can adjust the number if they wish).

In other words, Obama's FY2009 performance is like a relief pitcher who enters a game in the fourth inning trailing 19-0 and allows another run to score. The extra run is nothing to cheer about, of course, but fans should be far more angry with the starting pitcher. That having been said, Obama since that point has been serving up meatballs to the special interests in Washington, so his earned run average may actually wind up being worse than his predecessor's. He promised change, but it appears that Obama wants to be Bush on steroids.

Thursday, November 26, 2009

The Reagan Tax Cuts, Budget Forecasting, and Government Revenue

While perusing the Internet, I saw an article by Iwan Morgan, who is the author of The Age of Deficits: Presidents and unbalanced Budgets from Jimmy Carter to George W. Bush. The author asserted that, "The deficit explosion on his watch was a nasty surprise for Ronald Reagan not a deliberate strategy to reduce government. In his rosy interpretation of Laffer curve theory, the personal tax cuts he promoted in 1981 would deliver higher not lower revenues through their boost to economic growth." The first sentence is an interesting interpretation, since many leftists believe that Reagan deliberately created deficits to make it more difficult for Democrats in Congress to increase spending. I'm agnostic on that issue, but Morgan definitely errs (or is grossly incomplete) in the second sentence. The Reagan Administration did not employ dynamic scoring when predicting the revenue impact of its tax rate reductions. It is true that the White House failed to predict the drop in revenues, particularly in 1982, but that happened because of both the second stage of the 1980-82 double-dip recession and the unexpected drop in inflation (the Congressional Budget Office also failed to predict both of these events, so Reagan's forecasters were hardly alone in their mistake). Moreover, Morgain's dismissal of the Laffer Curve is unwarranted. While several GOP politicians exaggerated the relationship between tax rates, taxable income, and tax revenue, this does not mean it does not exist. The table below, which is based on data from the IRS's Statistics of Income, shows what happened to tax collections from upper-income taxpayers between 1980 and 1988. Supply siders can be criticized for many things, especially their apparent disregard for the importance of limiting the size of government, but the IRS figures clearly show that lower tax rates were followed by more rich people, more taxable income, and more tax revenue. For those keeping score at home, that's a perfect batting average for supply-side economics.

I Suppose We Should Give Thanks that Government Is Not Even Bigger

Our friends at Americans for Tax Reform have calculated that taxes account for nearly 41 percent of the cost of a family's Thanksviging dinner:

As you finalize your Thanksgiving plans, be sure to reserve a seat at your table for an extra guest: Uncle Sam. Have you ever asked yourself how much of the cost of your Thanksgiving feast is owed to the fact that the government takes a big bite at it in hidden taxes? The Americans for Tax Reform Foundation and the Center for Fiscal Accountability have calculated just how big that government “tax bite” for Thanksgiving is, and it clocks in at a whopping 40.91 percent. ...And that is only if your family does not have to drive or fly to get to the Thanksgiving party, or stay at a hotel for the duration of the festivities, as domestic airfare, gasoline, and hotel stays have their own “tax bites” which are even higher than the bite the government takes out of your Thanksgiving meal, and which we calculated last year.

Happy Thanksgiving

Could it be, as this National Review post indicates, that the forces of political correctness are now going after Thanksgiving?!? But for what reason? I understand the motive of the anti-religion (as opposed to non-religion) crowd that seeks to marginalize Christmas, but Thanksgiving seems to be a very odd target. My guess, for what it's worth, is that Thanksgiving symbolizes the American Dream, and that not a very PC concept.

But I'm not a PC kind of guy, so I hope everyone enjoys their turkey and is thankful for the things that matter (as one of my softball buddies said, he is thankful for cloture, the 2nd Amendment, and Heidi Klum).

Wednesday, November 25, 2009

Is Supply-Side Economics Still Relevant?

I was part of a book forum at the Heritage Foundation, commenting on Brian Domitrovic's new book about the history of supply-side economics. My insights (or lack thereof) begin at the 20-minute mark of this video.

"Predatory Government" and "Rats Outside a Dumpster"

I debate the implications of Washington's lobbying industry on CNBC.

Tuesday, November 24, 2009

Greedy Local Politicians Attempt to Grab Revenue Far Outside Their Borders

Regular readers of this blog are familiar with the tax competition battle, which largely revolves around high-tax governments attempting to track - and tax - economic activity that migrates to lower-tax jurisdictions. But this is not just a global fight between decrepit welfare states such as France and fiscal havens such as the Cayman Islands. American states also compete with each other, and there are numerous examples of high-tax states such as California and New York trying to grab money from people who escape to zero-income tax states such as Nevada and Florida. The fight even even exists at the local level, and a good example is the attempt by politicians to tax faraway online travel agencies. The Orange County Register opines about these extraterritorial tax grabs:

A recent legal victory for some Texas cities against online travel companies over hotel taxes may have given Anaheim officials hope for their own case, but they shouldn't start celebrating just yet. Other cities have not fared as well in similar lawsuits. ...Here's what Fairview Heights, Anaheim and other cities wanted to change: In a typical transaction, a traveler picks a hotel and books a room, stays there, and pays the hotel a room charge plus a local occupancy tax based on the room charge. The hotel keeps the room charge and forwards the tax money to the government. Enter online travel companies like Expedia, Hotels.com, Orbitz, Priceline and Travelocity, which allow travelers to sort through hotels and book a room on a central Web site. These companies do not reserve or resell hotel rooms, but act as intermediaries to facilitate the transaction between hotel and traveler. The hotel receives an amount for the room, on which the city's hotel tax is based. Let's say I search a Web site and book a $100 hotel room. The online company charges me $10 for their service. Anaheim argues that hotel occupancy tax should be paid not only on the $100 room charge, but also on the $10 service fee. ...A federal bill is pending to limit hotel taxes to amounts collected by a hotel for occupancy purposes, excluding service fees and markups by intermediaries. The Constitution permits Congress to pass such laws if there is a danger that state and city laws are interfering with interstate commerce. Hotel taxes are attractive to local politicians because they are a way to shift the tax burden to "outsiders." But because every U.S. city has a hotel tax, we're all somebody else's "outsider." The net result is that everyone is taxing everyone else in an unaccountable way, and unless the cities and their lawyers are stopped, in an unpredictable way, too.

Mocking the Stimulus

Writing for The Hill, I explain why Keynesian-style stimulus does not work. In addition, I note that the so-called stimulus was just an excuse for pork-barrel spending. But my concluding point, excerpted below, is that the White House goofed politically by making specific claims about the good things that supposedly would happen by increasing the burden of government spending:

The only surprise was that the White House was foolish enough to make specific claims of the good results that supposedly would flow from all the pork-barrel spending. In part, this is the absurd notion of claiming 600,000-plus “jobs saved or created” when total employment actually has fallen by more than 3 million. But the bigger mistake was claiming that the faux stimulus would keep the unemployment rate from rising above 8 percent and that failure to squander $787 billion would cause the jobless rate to climb to 9 percent. The politicians got their wish, yet now the unemployment rate is above 10 percent. Brilliant.

Climate Change Alarmists Caught with Their Pants Down

The newspapers and blogosphere are buzzing with the revelation (from hacked emails) that proponents of the sky-is-falling school of climate change have conspired to hide data and smear critics. Here's a blurb from the Washington Post report:

...newly disclosed private exchanges among climate scientists at Britain's Climate Research Unit of the University of East Anglia reveal an intellectual circle that appears to feel very much under attack, and eager to punish its enemies. In one e-mail, the center's director, Phil Jones, writes Pennsylvania State University's Michael E. Mann and questions whether the work of academics that question the link between human activities and global warming deserve to make it into the prestigious IPCC report, which represents the global consensus view on climate science. "I can't see either of these papers being in the next IPCC report," Jones writes. "Kevin and I will keep them out somehow -- even if we have to redefine what the peer-review literature is!" In another, Jones and Mann discuss how they can pressure an academic journal not to accept the work of climate skeptics with whom they disagree. "Perhaps we should encourage our colleagues in the climate research community to no longer submit to, or cite papers in, this journal," Mann writes. "I will be emailing the journal to tell them I'm having nothing more to do with it until they rid themselves of this troublesome editor," Jones replies. ...Christopher Horner, a senior fellow at the libertarian Competitive Enterprise Institute who has questioned whether climate change is human-caused, blogged that the e-mails have "the makings of a very big" scandal. "Imagine this sort of news coming in the field of AIDS research," he added.

Monday, November 23, 2009

Fighting Critics from the Right and Left

I’ve always thought the middle of the road was for yellow stripes and dead ‘possums, so I’m instinctively uncomfortable when attacked from the right and the left. But that’s what happened with my commentary (which I also cross-posted at Cato-at-Liberty) about Bush, Obama, and the FY2009 budget deficit. Bruce Bartlett accused me of being a shill for the GOP on his facebook page, while a Redstate poster said I was giving Obama a free pass on all his spending.

I responded on Redstate, and you can click to read the entire post, but here’s the key points in my defense against attacks from the right:

Let’s deal with Mustango’s criticisms. He argues that budgets are passed by Congress, presumably implying that Nancy Pelosi, et al, should be blamed. The Speaker of the House is a complete statist, so I’m a big fan of anybody who points out her flaws, but since President Bush supported all of the wasteful spending adopted in the last year (as well as the first seven years) of his presidency, he also must bear responsibility for the results.

The second criticism is that I was letting Obama off the hook for his pork-filled stimulus. That’s definitely not the case. My blog post specifically noted that Obama bears part of the responsibility for the FY2009 deficit, but since less than $200 billion of so-called stimulus was allocated in FY2009, that is rather trivial compared to a budget deficit of more than $1.4 trillion. And even if the extra spending from the omnibus spending bill is added to Obama’s tab, his total is still less than $250 billion.
I’m sure I have plenty of flaws, but being squishy on the issue of the size of government surely is not on the list.

Obama's Prescription for Statism

Saw this while perusing Redstate.com. Very well done.

Sunday, November 22, 2009

Pelosi and Dems Looking at Global Tax on Financial Transactions

Imagine if the government got to pick your pocket every time you engaged in a financial transaction? That nightmare scenario is a distinct possibility now that senior Democrats have joined with Eruopean politicians and urged that such a tax be applied on a worldwide based. Reuters has the disturbing details:

Any tax imposed on financial transactions would have to take effect internationally to keep Wall Street jobs and related business from moving overseas, U.S. House of Representatives Speaker Nancy Pelosi said on Thursday. "It would have to be an international rule, not just a U.S. rule," Pelosi said at a news conference. "We couldn't do it alone, we'd have to do it as an international initiative." Several House Democrats have proposed a Wall Street tax to pay for job-creating legislation they plan to pass in December. The tax, which could raise $150 billion per year, would tap into widespread public outrage at Wall Street in the wake of the financial crisis. ...The No. 4 Democrat in the House, Representative John Larson, said his proposal to impose a 0.25 percent tax on over-the-counter derivatives transactions would apply internationally. "Part of our proposal would include that it would be international," Larson told Reuters after meeting with other lawmakers about the jobs package. Democratic Representative Peter DeFazio said his separate proposal, which would tax a wider array of trading activity, would cover all U.S. corporations and individuals no matter where their trades took place. ...Britain urged other governments earlier this month to consider a bank tax as a way to fund future bailouts, and France and Germany have also called for a bank tax. The International Monetary Fund is studying the idea.

Utter Misery for the Bulldog Nation

It was bad enough that UGA VII died unexpectedly, but that was nothing compared to losing to Kentucky...at home...after going into halftime with a 20-6 lead. This has not been the best of seasons, and I'm not terribly optimistic about next week's game against Georgia Tech. So I'm going to retreat into my shell and think about memories of a better time...

Saturday, November 21, 2009

Geithner, Corruption, and the Fed

Tim "Turbotax" Geithner is getting attacked on the Hill because of the weak economy, but he should be condemned for the corruption and favoritism he displayed while head of the New York Fed during the financial crisis. The New York Times recently reported how much of the money wasted on AIG actually was designed to go in the pockets of Geithner's friends and cronies in the banking sector:
The Federal Reserve Bank of New York gave up much of its power in high-pressure negotiations with the American International Group's trading partners last year, according to a government report made public on Monday. Just two days before the New York Fed paid AIG’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance. ...Goldman Sachs and the top French bank regulator. They argued, with others, that it would be improper and perhaps even criminal to force AIG’s trading partners to bear losses outside of bankruptcy court. The banks and the regulator were confident that the New York Fed was not willing to push AIG into bankruptcy, because earlier in the fall the New York Fed had stepped in with $85 billion to prop up the insurer. ...The Fed “refused to use its considerable leverage,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report to be officially released on Tuesday, examining the much-criticized decision to make AIG’s trading partners whole when people and businesses were taking painful losses in the financial markets. There have been suggestions that the Fed chose to negotiate weakly, Mr. Barofsky said, to give a “backdoor bailout” to AIG’s banks. He said Mr. Geithner and the Fed’s lawyers had denied this, but added that “irrespective of their stated intent,” there was no doubt about the result: “Tens of billions of dollars of government money was funneled inexorably and directly to AIG's counterparties.”

Friday, November 20, 2009

Class-Warfare Taxation and England's Fiscal Suicide

After several posts about crazy decisions by the U.K. government, mostly involving extreme political correctness, it's time to get back to basics and look at tax policy. A financial services consulting firm in London has just released a survey with the stunning finding that one-fifth of entrepreneurs are thinking of escaping the county because of punitive taxes - particularly the new top tax rate of 50 percent. Here's what Tax-news.com reported:
The results of a new survey suggest that one-fifth of UK-based entrepreneurs earning more than GBP150,000 are planning to flee Britain in search of countries with more favorable tax rates. The poll of more than 300 entrepreneurs by business advisors Tenon also found that many more may follow in an attempt to escape the 50% rate of income tax, due to be introduced from next April on annual incomes above GBP150,000, with nearly half of the respondents (48%) still deciding what action to take. ...Tenon points out that in the last month, high profile names such as the actor Sir Michael Caine and the artist Tracey Emin have threatened to change their tax residency to countries with more favorable tax rates. Popular locations for redomiciling include Monte Carlo, Guernsey, Liechtenstein, and the Cayman Islands. Andy Raynor, Chief Executive of Tenon Group, noted that entrepreneurs are showing their disapproval of the tax measures by "letting their feet do the talking."
The Mayor of London, meanwhile, is much less restrained regarding the foolishness of Gordon Brown's class-warfare policy. Here's what he has to say in the Daily Telegraph:

Not everyone can be relied upon to mourn the departure of Tracey Emin and her duvet. ...Some readers may feel that the country can rub along without her. ...And then there may be people who don't give a monkey's that Michael Caine is thinking of vamoosing, or that we are about to lose Eddie Jordan, the former Formula One chief, or the milk tycoon Lord Haskins. Some of you may not care a tinker's cuss if the former bookshop king Tim Waterstone deserts these shores, and as for the impending absence of Hugh Osmond, an entrepreneur who has had a role in everything from pizza to insurance, you may feel that we just have to dry our eyes and get a grip on our feelings. ...the 50p tax rate that is beginning to drive these people away is a disaster for this country, and it is a double disaster that no one seems willing to talk about it. When Margaret Thatcher's government cut the top rate of tax to 40 per cent in 1988, she was completing a series of reforms – beginning with the removal of exchange controls and followed by the Big Bang – that helped to establish London as the greatest financial centre on earth. Britain had been transformed from a sclerotic militant-ridden basket-case to a dynamic enterprise economy, and the capital became a global talent magnet. ...So it is utterly tragic, at the end of the first decade of this century, that we are back in the hands of a government whose mindset seems frozen in the wastes of the 1970s. If Gordon Brown remains in power – and perhaps even if he does not – Britain's top rate of tax will soar far above that of our most important global competitors. ...even on the Government's figures it is only due to raise £2.5 billion of the £700 billion required – and those estimates may be wildly optimistic. This tax is predicted to drive away at least 25,000 people; it may simply encourage more avoidance; it may actually cost money, not bring it in. After all, when Mrs Thatcher cut the top rate in 1988, the Treasury saw yields go up. People stopped avoiding taxation; people thought it worth their while to get up at 5am and work that extra bit harder – and the share paid by higher-rate taxpayers actually increased as a result of the tax cut. What Gordon Brown wants to do is therefore economically illiterate.
Last but not least, here's the Center for Freedom and Prosperity's video, which explains why punitive soak-the-rich tax increases are fundamentally misguided.



By the way, I'm not picking on England. America is soon going to be making the same self-destructive mistake.

Obama Home Teleprompter Malfunctions

The Onion News Network hits another home run with this faux news report about Obama's home teleprompter.



And in the same spirit, here's the classic put out last year by Iowahawk.

Thursday, November 19, 2009

Climate Change Causes AIDS?!?

The enviro-nuts must be getting really desperate. A bureaucrats from the Philippines actually is claiming that global warming is causing more prostitution, which is increasing the spread of HIV. I can easily believe that more prostitution is a reciple for more sexually-transmitted diseases, but the assertion that climate change is causing more prostitution is laughably absurd:

Effects of climate change have driven women in communities in coastal areas in poor countries like the Philippines to risk dangerous jobs, and sometimes even into the flesh trade. Suneeta Mukherjee, country representative of the United Nations Food Population Fund (UNFPA), said women in the Philippines are the most vulnerable to the effects of climate change in the country. “Climate change could reduce income from farming and fishing possibly driving some women into sex work and thereby increase HIV infection," Mukherjee said during the Wednesday launch of the UNFPA annual State of World Population Report in Pasay City.

Don't Blame Obama for Bush's FY2009 Deficit

Some critics are lambasting President Obama for record deficits. This is not a productive line of attack, largely because it puts the focus on the wrong variable. America's fiscal problem is excessive government spending, and deficits are merely a symptom of that underlying disease. Moreover, if deficits are perceived as the problem, that means both spending restraint and higher taxes are solutions. The political class, needless to say, will choose the latter approach 99 percent of the time. A higher tax burden, however, simply means that debt-financed spending is replaced by tax-financed spending, which is akin to jumping out of the frying pan and into the fire, or vice-versa.

In addition to being theoretically misguided, critics sometimes blame Obama for things that are not his fault. Listening to a talk radio program yesterday, the host asserted that Obama tripled the budget deficit in his first year. This assertion is understandable, since the deficit jumped from about $450 billion in 2008 to $1.4 trillion in 2009. As this chart illustrates, with the Bush years in green, it appears as if Obama's policies have led to an explosion of debt.

But there is one rather important detail that makes a big difference. The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year. While this make sense to a casual observer, it is largely untrue. The 2009 fiscal year began October 1, 2008, nearly four months before Obama took office. The budget for the entire fiscal year was largely set in place while Bush was in the White House. So is we update the chart to show the Bush fiscal years in green, we can see that Obama is partly right in claiming that he inherited a mess (though Obama actually deserves a small share of the blame for Bush's last deficit since earlier this year he pushed through both an "omnibus" spending bill and the so-called stimulus bill that increased FY2009 spending).

It should go without saying that this post is not an argument for Obama's fiscal policy. The current President promised change, but he is continuing the wasteful and profligate policies of his big-spending predecessor. That is where critics should be focusing their attention.

Great Moments in Local Government

Posts in this category normally mock foolish and wasteful policies by a state or local government, but the target this time is the union representing government employees in Allentown, Pennsylvania. The boss of the union, upset that the town had to get rid of some excess bureaucrats, is threatening to file a grievance to complain about a boy scout who is clearing a walking path in a local park. Heaven forbid that a unionized bureaucrats is being overpaid to do the same job!

In pursuit of an Eagle Scout badge, Kevin Anderson, 17, has toiled for more than 200 hours hours over several weeks to clear a walking path in an east Allentown park. Little did the do-gooder know that his altruistic act would put him in the cross hairs of the city's largest municipal union. Nick Balzano, president of the local Service Employees International Union, told Allentown City Council Tuesday that the union is considering filing a grievance against the city for allowing Anderson to clear a 1,000-foot walking and biking path at Kimmets Lock Park. "We'll be looking into the Cub Scout or Boy Scout who did the trails," Balzano told the council. Balzano said Saturday he isn't targeting Boy Scouts. But given the city's decision in July to lay off 39 SEIU members, Balzano said "there's to be no volunteers." No one except union members may pick up a hoe or shovel, plant a flower or clear a walking path.

Wednesday, November 18, 2009

More Insanity from England

I really do like the English. I enjoy London, and have been threre enough to know my way around the "tube." I've spoken at conference in Oxford and Cambridge. I have dated English women. So I am not going out of my way to pick on England. But I despise stupid and/or oppressive government policies, and a bunch of jaw-dropping stories involving England have come to my attention recently, mostly thanks to conventional websites such as the Drudge Report. The latest example is from The Corner at Nationalreview.com, and features a former soldier who got arrested and convicted (and may even go to jail for five years) because he found a gun in his yard and he turned it over to the police. I presume this is in part a reflection of the anti-gun ideology of the UK government, but are prosecutors and judges given no leeway to avoid foolish prosecutions or protect innocent people from absurd charges? Here is the news report:
A former soldier who handed a discarded shotgun in to police faces at least five years imprisonment for "doing his duty". Paul Clarke, 27, was found guilty of possessing a firearm at Guildford Crown Court on Tuesday – after finding the gun and handing it personally to police officers on March 20 this year. The jury took 20 minutes to make its conviction, and Mr Clarke now faces a minimum of five year's imprisonment for handing in the weapon. In a statement read out in court, Mr Clarke said: "I didn't think for one moment I would be arrested. ...The court heard how Mr Clarke was on the balcony of his home in Nailsworth Crescent, Merstham, when he spotted a black bin liner at the bottom of his garden. In his statement, he said: "I took it indoors and inside found a shorn-off shotgun and two cartridges. "I didn't know what to do, so the next morning I rang the Chief Superintendent, Adrian Harper, and asked if I could pop in and see him. "At the police station, I took the gun out of the bag and placed it on the table so it was pointing towards the wall." Mr Clarke was then arrested immediately for possession of a firearm at Reigate police station, and taken to the cells. ...Prosecuting, Brian Stalk, explained to the jury that possession of a firearm was a "strict liability" charge – therefore Mr Clarke's allegedly honest intent was irrelevant. Just by having the gun in his possession he was guilty of the charge, and has no defence in law against it, he added. ...Judge Christopher Critchlow said: "This is an unusual case, but in law there is no dispute that Mr Clarke has no defence to this charge. "The intention of anybody possessing a firearm is irrelevant."

Tuesday, November 17, 2009

Being Anti-Obama Is not the Same as Being Pro-Bush

This blog has consistently complained about the statist policies of the Obama Administration, leading a number of people to complain that I am pro-Republican. Or they assume that I was a Bush supporter. Nothing could be further from the truth. If people have watched my videos or seen my various TV interviews, you will have seen me excoriate big-government Republicans such as Bush. And this is not something I started to do on January 20, 2009. I was an unrelenting critic of the Wall Street bailout in Bush's final months. And I was bitterly complaining about Bush's fiscal profligacy even before then. Here are some of the highlights of a column that I wrote in early 2007, which was titled "Bring Back Clinton":

To paraphrase Clinton Treasury Secretary Lloyd Bentsen, George Bush is no Ronald Reagan. ...on Bush’s watch, and with his signature, the burden of federal spending rose to 20.3 percent of GDP in 2006, up from just 18.5 percent when he took office. During the Clinton years, by contrast, federal spending fell as a share of GDP, from 21.4 percent in 1993 to 18.5 percent in 2001. ...even when defense spending is excluded, Clinton reduced the burden of government, while Bush has expanded it. ...According to the Congressional Budget Office, entitlement spending has increased from 10.9 percent of GDP when Bush took office to 11.9 percent of GDP in 2006. During the Clinton years, spending on so-called mandatory programs fell from 11.2 percent of GDP to 10.9 percent of GDP. The domestic discretionary spending numbers tell a similar story: During the Clinton years, these programs dropped from 3.4 percent of GDP to 3.2 percent. Since Bush took office, they have risen to 3.5 percent. ...Take trade, for example. At best, Bush has a mixed record. The Central American Free Trade Agreement is a step in the right direction, but his steel tariffs and agricultural subsidies are examples of anti-trade initiatives. Clinton policy was unambiguously pro-trade, however, largely because of the approval and implementation of the North American Free Trade Agreement and the General Agreement on Tariffs and Trade that also launched the World Trade Organization. Clinton gets a better grade on regulatory policy, as well. Bush signed into law the prohibitively expensive Sarbanes-Oxley law, as well as a market-distorting energy bill. The Clinton years, by contrast, saw the burden of regulation reduced on numerous sectors of the economy, including agriculture, financial services and telecommunications. Clinton also beats Bush on federalism. He signed a welfare reform legislation that ended an entitlement program and reduced the central government’s power and authority. On education, Bush went the other direction. His No Child Left Behind Act increased federal control over an area that properly belongs under the purview of state and local governments.
If people want to call me an anti-government ideologue, I don't think that's completely accurate, but it's a fair observation. If people want to call me an unrealistic libertarian dreamer, I plead guilty. But please don't denigrate me by saying I'm a Republican.

WTF Is Wrong with England?!?

We just posted about a crazy idea from England to give each person a carbon allowance. A few months ago, we posted about the government in the U.K. interfering with two mothers who take turns babysitting each other's children. Now we have a story from the Times about bureaucrats wanting to barge into people's homes and maintain databases to see whether they are being government-approved parents. This brings nanny-state fascism to a new low:
Health and safety inspectors are to be given unprecedented access to family homes to ensure that parents are protecting their children from household accidents. New guidance drawn up at the request of the Department of Health urges councils and other public sector bodies to “collect data” on properties where children are thought to be at “greatest risk of unintentional injury”. ...The draft guidance by a committee at the National Institute for Health and Clinical Excellence (Nice) has been criticised as intrusive and further evidence of the “creeping nanny state”. ...Nice also recommends the creation of a new government database to allow GPs, midwives and other officials who visit homes to log health and safety concerns they spot. ...Matthew Elliott, of the TaxPayers’ Alliance, said: “It is a huge intervention into family life which will be counter-productive. “Good parents will feel the intrusion of the state in their homes and bad parents will now have someone else to blame if they don’t bring up their children in a sensible, safe environment.”

Monday, November 16, 2009

Even Obama’s Make-Believe Jobs Are Not Real

The White House recently began claiming that the “Recovery Act” had “created or saved” 640,000-plus jobs. This turns out to have been a political mistake, in part because even sympathetic reporters understand that the “jobs saved” measure allows for creative accounting. But the White House also erred by providing (supposed) details about the jobs that were created. This made it very easy for reporters and other curious people to do a bit of fact checking, which has generated a spate of stories showing that the White House’s numbers are wrong, even using make-believe methodology. The Washington Examiner has put together a very useful interactive map which links to many of the news reports debunking the Administration’s fraudulent numbers.

For a refresher coures in “stimulus” issues, here is the Center for Freedom and Prosperity’s three-part series on Keynesianism, stimulus, and growth.





The High Cost of European Union Bureaucracy

The clever folks at the Taxpayers Alliance in the United Kingdom have a new video documenting some of the wasteful European Union programs that are imposing a heavy burden on average people.

Sunday, November 15, 2009

Environ-Fascism

This is almost beyond parody. The head of the U.K.'s Environment Agency actually wants to track everyone's carbon use and make them pay extra is they have an "extravagent lifestyle." The Telegraph reports on this odious bit of cloying fascism:
Lord Smith of Finsbury believes that implementing individual carbon allowances for every person will be the most effective way of meeting the targets for cutting greenhouse gas emissions. It would involve people being issued with a unique number which they would hand over when purchasing products that contribute to their carbon footprint, such as fuel, airline tickets and electricity. Like with a bank account, a statement would be sent out each month to help people keep track of what they are using. ...Lord Smith will call for the scheme to be part of a "Green New Deal" to be introduced within 20 years when he addresses the agency's annual conference on Monday. ...Ruth Lea, an economist from Arbuthnot Banking Group, told the Daily Mail: "This is all about control of the individual and you begin to wonder whether this is what the green agenda has always been about. It's Orwellian. This will be an enormous tax on business."

Weekly Economics Lesson: The "Sugar High" of Easy Money

Steve Pearlstein of the Washington Post has a common-sense column warning about the dangers of the Fed's easy-money policy. It is possible, to be sure, that the Fed will withdraw (or "soak up") all this liquidity as the economy recovers, but all the signs suggest that the central bank is kowtowing to the politicians and debasing the currency in order to help politicians create illusory growth. This is a recipe for a return to the 1970s. The bad policy started under Bush (and Greenspan) and is continuing under Obama (and Bernanke):

The Federal Reserve is still going through its "lessons-learned" exercise from the recent financial crisis, but there's one lesson it clearly has not yet absorbed -- the one about ignoring and enabling credit bubbles. That's the only conclusion that can be drawn from the Fed's decision last week to not only keep its benchmark interest rates at zero but also let everyone know that it intends to leave them there for a good long time. ...Not surprisingly, all of this sparked a week-long party in financial markets that had already experienced powerful rallies over the past six months. Even with Thursday's modest pullback on Wall Street, U.S. stocks are up 60 percent since March, and share prices in emerging markets have nearly doubled. Commodity prices are soaring once again, led by gold, which is now selling for more than $1,100 an ounce, and crude oil, which is up a whopping 126 percent since February. A rally in the junk-bond and third-world debt markets has driven interest rates back to where they were before the crisis. In urban China, India and Brazil, property prices have doubled in the past year. "The markets are on a sugar high," Mohamed El-Erian, chief executive of Pimco, the giant money manager, told Newsweek's Rana Foroohar last week. Judging from how sharply and quickly these prices have risen, it's a pretty good guess that most of the buying has not been done by long-term investors who are suddenly upbeat about the prospects of global economic growth. The better bet is all this is the handiwork of short-term speculation by banks, hedge funds, private-equity funds and other financial center wise-guys moving as a herd, financing their purchases directly or indirectly with some of that yummy zero-percent money provided courtesy of the Fed. ...There's no way to know how long all this can continue before one of these bubbles finally bursts, the dollar spikes upward and investors all rush to unwind their trades at the same time. But it is a good guess that it will last as long as the Fed and other central banks indicate there is no end in sight for the current cheap-money regime. The longer they wait, the bigger the bubbles, and the bigger the mess to clean up. All of which is why the recent statements by policymakers were so disappointing -- and so dangerous.

Saturday, November 14, 2009

Obamacare Will Be a Budget Buster

Appearing on Fox Business News, I explain why government-run healthcare will be a fiscal disaster for taxpayers.

Weekly Political Humor, PG Rating

I don't know which is scariest. Probably Biden. Maybe Frank.

Friday, November 13, 2009

Obama Administration Defends Tax Competition

Since the Treasury Department is still very much on the wrong side of the OECD anti-tax competition campaign, don't get too excited about the headline. But it is still nice to see that Tim Geithner and the rest of the crowd in the Obama Administration are not so hopelessly statist that they are willing to go along with a global tax on financial transactions. The Wall Street Journal opines:

In the department of bad ideas that won't go away, Exhibit A is a global tax on financial transactions. British Prime Minister Gordon Brown mooted the tax last weekend before the G-20 finance ministers in St. Andrews, Scotland, where he was promptly rebuffed by Treasury Secretary Timothy Geithner. ...it's easy to see why high-tax countries such as France and Germany relish the idea. Tax competition is a bĂȘte noire for the Western European countries whose governments eat up close to half of their economies. The U.K. is back in that club after the post-financial-panic recession lopped 6% off its GDP. Scrambling for revenue—and unwilling to hamstring London markets alone—Mr. Brown is suddenly promoting global tax coordination. ...Like all tax-harmonization schemes, the Tobin levy is designed to raise taxes above a level that is hard to sustain in a competitive world. This is why its backers have always insisted on a global imposition of the tax. Kudos to Secretary Geithner for offering Mr. Brown a reality check.

A Delightfully Vicious Attack Against Brussels

The Guardian is a left-wing paper, so the author of this column may also be a collectivist, but he gets credit for being honest about the European Union's shortcomings. Even more important, he has several very clever lines - such as "post-democratic statism" and "greatest boondoggle of the late 20th century." His column is designed to promote Gordon Brown for the job of EU President, but read it for the scathing rhetoric:

He is clearly unhappy with the rough and tumble of democratic politics, with the daily grind of public appearances, glad-handing and schmoozing. But these are not required in Brussels, where nobody is elected to anything and such populism as smiling at cameras and holding referendums are anathema. Brown, dark-suited and anonymous, is a natural oligarch, his governing style attuned to the post-democratic statism of 21st-century Europe. ...If a Brown presidency were a success it would be a triumph for Europe. It might help rescue the meretricious gravy train that is today's EU hierarchy, perhaps even setting it on a path to usefulness. If Brown failed, nothing would be lost, since everyone knows it is not a proper job anyway. Since it was invented by the greatest boondoggle of the late 20th century, the Lisbon treaty, it has been a title looking for a purpose – which is why Tony Blair so wants it. ...An inability to think laterally has long been the curse of the European movement. A sign of its intellectual insecurity is that it cannot handle scepticism, treating any but the most craven sycophant as an enemy. At the Nice summit that followed the corruption scandals of 1998-9, the EU's spin doctors declared that in future "decisions should be taken as closely as possible to the citizen". They lied, and knew it. So did the public. Since 2005, few have dared ask Europe's citizens if they agreed with the Lisbon constitution, and those that did received bloody noses. The reneging of Labour and the Liberal Democrats on 2005 election commitments to a referendum showed the power of Europe's oligarchs to outflank democratic accountability. It is near impossible to ascertain what any European citizen expects or wants from what is to be an extraordinary sovereign power placed over them. Nothing in recent constitutional history has been more cynical – or more dangerous – than the fact that referendums voting yes to euro-integration are accepted and those that vote no are rejected. ...The tragedy of Lisbon is that it is a rotten treaty, slithering from the disciplines needed for freer trade to the phoney utopia of a level socioeconomic playing field across the continent. This will not work. It will propel the EU into constant friction with national parliaments, and stir public anger at being denied a vote on the new constitution.

Thursday, November 12, 2009

School Choice Means More Jobs

There is a growing body of evidence showing that school choice improves academic outcomes, but a new study published by the South Carolina Policy Council highlights research showing that a market-based education system also leads to more self-employment among youth. Here is the key section:

South Carolina is in dire need of economic growth, especially in its rural communities. This study shows how, hypothetically, school choice would have increased the number of small businesses created by residents aged 16-25 in five counties in South Carolina. Our findings are based on the research of Russell Sobel and Kerry King, which shows that counties that offer school choice see a significantly higher rate of self-employment among young men and women. According to Sobel and King, voucher-based school choice can increase youth self-employment by as much as 25 percent. In this study we found that a similar program in the counties of Clarendon, Hampton, Lee, Marlboro and Williamsburg could have created 123 small businesses and 379 additional jobs.

Pelosi's Hidden Capital Gains Tax Hike

The punitive class-warfare mentality of the left can be found buried in the healthcare bill. The Wall Street Journal dug deep and found a big capital gains tax increase. Ideally, there should be no double taxation of income that is saved and invested, which means the right tax rate is zero. Boosting the rate from 15 percent to 25.4 percent is a big step in the wrong direction, and almost surely will lose revenue (and definitely will undermine growth):

Our job is to read bad legislation so you don't have to, and on that score we may demand combat pay for plowing our way through the House health-care bill that passed on Saturday. ...House Democrats are funding their new entitlement with a 5.4% surtax on incomes above $500,000 for individuals and above $1 million for joint filers. The surcharge is intended to snag the greatest number of taxpayers to raise some $460.5 billion, and so the House has written it to apply to modified adjusted gross income. That means it includes both capital gains and dividends. That surtax takes effect on January 1, 2011, or the day the Bush tax rates of 2001 and 2003 expire. Today's capital gains tax rate of 15% would bounce back to 20% because of the Bush repeal and then to 25.4% with the surtax. That's a 69% increase, overnight.

Wednesday, November 11, 2009

Poetic Justice for Susette Kelo

The Kelo case was one of the most reprehensible Supreme Court decisions in recent history. The Court said it was okay for a local government to seize a private home solely to please a big corporation. So it is morbidly satisfying to see that the strategy has backfired for the town. Tim Carney reports for the Washington Examiner:

Susette Kelo's little, pink house in New London, Conn. -- like the houses of all her neighbors -- is now a pile of rubble, overgrown with weeds. But Pfizer, the company that called for the demolition in order to build a new research and development plant, announced Monday it is packing up and leaving town in order to cut costs after its merger with fellow drug-giant Wyeth. New London now has a wasteland where a neighborhood once stood, and no jobs or business to show for it. It's another travesty of central planning. ...Kelo, and other residents who didn't want to move, sued to block the condemnation. They lost, but they fought all the way to the U.S. Supreme Court. There, the four liberal justices joined with moderate Anthony Kennedy to rule in favor of the developers -- the takings were perfectly legal. ...the takings in New London begin to sound like a great progressive victory: government, triumphing over the exploitive notion of "property rights," helps the many at the expense of a few. But, New London was really another example of political cronyism and politicians using the might of government in order to benefit well-connected big business at the expense of those poorer and less influential. Consider that the head of the New London Development Corporation was Claire Gaudiani, who was married to David Burnett, the Pfizer executive who wanted "a nice place to operate." Pfizer vice president George Milne also sat on the development corporation's board. ...Pfizer got its loot - free land, special tax breaks, and government-funded clean-up of the neighborhood (including clearing out the unsightly neighbors) - and the area prepared for economic "rejuvenation," as Justice Stevens put it. It didn't work out that way. The Fort Trumbull neighborhood Pfizer had bulldozed today consists only of "weeds, glass, bricks, pieces of pipe and shingle splinters," according to the Associated Press.

Anti-Gun Policy Helped Terrorism at Fort Hood

The indispensable John Lott explains how a Clinton-era anti-gun policy created a safe environment for Major Hasan's terrorist attack. As Lott explains in his Foxnews.com article, gun bans only disarm innocent people. Terrorists and other human refuse take advantage of such situations to kill more people:

Shouldn't an army base be the last place where a terrorist should be able to shoot at people uninterrupted for 10 minutes? After all, an army base is filled with soldiers who carry guns, right? Unfortunately, that is not the case. Beginning in March 1993, under the Clinton administration, the army forbids military personnel from carrying their own personal firearms and mandates that "a credible and specific threat against [Department of the Army] personnel [exist] in that region" before military personnel "may be authorized to carry firearms for personal protection." ...The unarmed soldiers could do little more than cower as Major Nidal Malik Hasan stood on a desk and shot down into the cubicles in which his victims were trapped. Some behaved heroically, such as private first class Marquest Smith who repeatedly risked his life removing five soldiers and a civilian from the carnage. But, being unarmed, these soldiers were unable to stop Hasan's attack. The wife of one of the soldiers shot at Ft. Hood understood this all too well. Mandy Foster's husband had been shot but was fortunate enough not to be seriously injured. In an interview on CNN on Monday night, Mrs. Foster was asked by anchor John Roberts how she felt about her husband "still scheduled for deployment in January" to Afghanistan. Ms. Foster responded: "At least he's safe there and he can fire back, right?" -- It is hard to believe that we don't trust soldiers with guns on an army base when we trust these very same men in Iraq and Afghanistan. ...The law-abiding, not the criminals, are the ones who obey the ban on guns. Instead of making areas safe for victims, the bans make it safe for the criminal. Hasan not only violated the army's ban on carrying a gun, he also apparently violated the rules that require soldiers to register privately owned guns at the post. Research shows that allowing individuals to defend themselves dramatically reduces the rates of multiple victim public shootings. Even if attacks still occur, having civilians with permitted concealed handguns limits the damage. A major factor in determining how many people are harmed by these killers is the amount of time that elapses between when the attack starts and someone is able to arrive on the scene with a gun. ...All the multiple victim public shootings in the U.S. -- in which more than three people have been killed -- have all occurred in places where concealed handguns have been banned.

Tuesday, November 10, 2009

The Left's Real Agenda

An honest statist at the New Yorker openly admits that a key purpose of Obamacare is to create a new entitlement that will make people more dependent on government and therefore more likely to support Democrats. The Wall Street Journal's editorial page admires Mr. Cassidy's honesty, but obviously is troubled by the implications. For what it's worth, Cassidy's argument is very similar to the one made by Bill Clinton's pollster back in the early 1990s, so we can't say we haven't been warned what the left wants:

...let's give credit to John Cassidy, part of the left-wing stable at the New Yorker, who wrote last week on its Web site that "it's important to be clear about what the reform amounts to." Mr. Cassidy is more honest than the politicians whose dishonesty he supports. "The U.S. government is making a costly and open-ended commitment," he writes. "Let's not pretend that it isn't a big deal, or that it will be self-financing, or that it will work out exactly as planned. It won't. What is really unfolding, I suspect, is the scenario that many conservatives feared. The Obama Administration . . . is creating a new entitlement program, which, once established, will be virtually impossible to rescind." Why are they doing it? Because, according to Mr. Cassidy, ObamaCare serves the twin goals of "making the United States a more equitable country" and furthering the Democrats' "political calculus." In other words, the purpose is to further redistribute income by putting health care further under government control, and in the process making the middle class more dependent on government. As the party of government, Democrats will benefit over the long run.

Does Prohibition Reduce Drug Use?

The war against drugs certainly has been good for government, with bigger budgets, more bureaucracy, and new powers.

But does it have any positive impact, even from the perspective of people (like me) who think drug use has a net negative impact on both users and society?

The answer, almost surely, is no. A recent article from The Economist finds that marijuana use is very low in Portugal, even though most drugs - including heroin and cocaine - were decriminalized in 2001.

So if the Drug War has lots of bad consequences and no good consequences, isn't it time to stop? After all, if you're in a hole, doesn't it make sense to stop digging?

Obamacare Will Be a Budget Buster

This video provides 12 reasons in less than 7 minutes.

Monday, November 9, 2009

Communism Was - and Still Is - Evil

This Reason.tv video reminds us about the horrors of totalitarian oppression. The fall of the Berlin Wall was a tremendous victory for freedom and could be Ronald Reagan's greatest accomplishment.

Sunday, November 8, 2009

The Most Boring Video, or the Most Evil Video?

The UK-based Daily Telegraph makes fun of a video produced by the English government, asking whether deserves as award for being the most boring video on youtube.

It is a tedious production, but perhaps it deserves an award for being the most sinister or collectivist video on youtube. The video is designed to bully Brits into telling tax authorities about offshore accounts, and the narrator brags that the tax authorities has "more powers" and actually has the nerve to complain that people with undeclared accounts are "robbing public services of much needed funding."

Yes, robbery is taking place. But at the risk of pointing out the obvious, it is government that is using coercion to take money it doesn't deserve.

Saturday, November 7, 2009

Pelosi's Bureaucratic Maze

Republicans usually are not very creative, so I'm uncharacteristically impressed that they have come up with a devastating chart showing the bureaucratic nightmare that will be created (on top of the current mess) for health care.

Congressman Brady of Texas gets an award for the best one-liner, saying about the Pelosi plan that "If the IRS and Medicare had a baby, it would look like this."

For a closer look, click this PDF link.

Friday, November 6, 2009

Bad News from Prague

Last month, this blog noted the bad news from Ireland, where voters were bullied into endorsing the so-called Lisbon Treaty to create a bigger and more powerful European Union bureaucracy in Brussels. Now, the last obstacle has been cleared as Czech President Vaclav Klaus has signed the pact. The Euro-crats in Brussels are overjoyed, but this agreement will mean more bureaucracy, more centralization, and more harmonization. It also makes the EU even more anti-democratic. Reuters reports:

Czech President Vaclav Klaus signed the European Union's Lisbon Treaty Tuesday, bringing into force the EU's plan to overhaul its institutions and win a greater role on the world stage. Klaus was the last EU leader to ratify the treaty and his signature, coming after the top Czech court cleared the pact, means the bloc of nearly half a billion people can pick its first-ever long-time president and a more powerful foreign representative.

Thursday, November 5, 2009

Sometimes We Should Be Thankful They Don't Keep Their Promises

Here's the weekly political humor, though I hope Obama is very unsuccessful with the rest of his promises.

Reminds me of the old line about "Thank goodness we don't get all the government we pay for."

Obama's Job Alchemy: Pay Raises for Bureaucrats Become Jobs "Saved or Created"

The Administration's bogus job numbers are so outlandish that even the Associated Press is pointing out that the Emperor has no clothes. The AP report notes that the White house claim of 600,000-plus jobs is based on absudities such as claiming a job is saved when bureaucrats get pay increases. The White House also counted 935 jobs for an agency that has only 508 employees. For people in the real world, the actual data from the Department of Labor show that total employment has dropped by more than 3 million since Obama took office:

The government’s latest tally of stimulus jobs counted pay increases for existing workers as jobs saved in a popular federal preschool program, raising fresh questions about the process the Obama administration is using to tout the success of its $787 billion economic recovery plan. A review of the latest stimulus reports - which the White House promised would undergo extensive reviews to ensure accuracy - found that more than two-thirds of 14,506 jobs credited to the recovery act by Head Start programs involved pay increases. Health and Human Services spokesman Luis Rosero defended the practice. “If I give you a raise, it is going to save a portion of your job,’’ he said. ...Most of the inflated figures were like those cited in the 935 saved jobs reported by the Southwest Georgia Community Action in Moultrie, Ga. Director Myrtis Mulkey-Ndawula said she followed the guidelines the Obama administration provided and multiplied her 508 employees by 1.84 - the percentage pay raise they received - and came up with 935 jobs saved. ...More than 250 other community agencies receiving stimulus cash from the HHS Administration for Children and Families similarly reported saving jobs when using the money to give pay raises, pay for training and continuing education, extend employee work hours, or buy equipment, according to their spending reports.

Wednesday, November 4, 2009

Another CNBC Battle over Big Government

I tangle once again with my regular nemesis on Street Signs. I almost feel sorry for Christian, since he feels he should fall on his sword to defend the Administration's make-believe "jobs created or saved" numbers. But then I remember that he has an annoying habit of trying to use up all the air time (his scientific name is Filibusteris Interruptus), and I realize that maybe this is karma.

Tuesday, November 3, 2009

New Jersey and Obamacare

Yesterday's elections were almost a complete disaster for the White House. In the races for governor, the GOP won a huge landslide in Virginia and knocked off the Democratic incumbent in New Jersey. The only silver lining to Obama's dark cloud came in upstate New York, where the collectivist Republican nominee apparently was successful in helping the Democratic candidate beat the Conservative Party candidate.

But this was a 99 percent defeat for the Obama Administration. Especially New Jersey.

From a policy perspective, it will make Democrats on Capitol Hill much more nervous about supporting government-run health care. This does not guarantee the defeat of Obamacare, but it is much less likely now than it was 24 hours ago.

Don't Copy Europe's Mistakes

In this new video from the Center for Freedom and Prosperity, Eline van den Broek of the Netherlands needs only about four minutes to explain why government-run healthcare in Europe is a mistake and why the problems in the U.S. healthcare system are the result of too much government, not too little.

Monday, November 2, 2009

A Continent-Wide Tax Would Hasten the Downfall of Europe

What is now known as the European Union started as a free-trade area, which is something to be admired. But over the decades, the free trade area has mutated into a statist super-bureaucracy pushing for centralization and harmonization. Now, according to leaked documents, the collectivists in Brussels want to impose a direct tax. This would be on top of the already onerous tax systems imposed by member nations. Needless to say, one hopes that one of the 27 nations will use its veto to stop this terrible idea. That would seem to be a simple and obvious task, but the vast majority of politicians in all European nations are terrified of being called anti-European, so even awful ideas become very plausible threats. The UK-based Daily Express reports:
Secret plans to seize more than £4billion a year from Britain and make its citizens pay taxes direct to Europe emerged last night. The leaked proposals, seen by the Daily Express, ...would...mean Brussels being given the power to dip straight into taxpayers’ pockets. Shadow Europe Minister Mark Francois vowed they would be resisted by a Tory government. He said: “The idea of an EU tax is a non-starter. ...Possible taxes suggested in the report – which could be discussed as soon as the start of the European summit in Brussels tomorrow – include levies on phone calls, flights, financial transactions or carbon emissions. ...Matthew Elliott, chief executive of the TaxPayers’ Alliance, branded the idea of direct taxation from Brussels an “outrage”. He added: “Control of taxation must rest solely in the hands of democratically elected politicians who answer to British taxpayers. “The EU has shown time and time again it is greedy for power. This is another sign they will never stop trying to grab it.”

Reagan Warns Against Socialized Medicine

This video has been circulating around the Internet for a while, but it's a classic. If you haven't seen it, take a look. And if you have seen it, it's refreshing to watch it again.

Sunday, November 1, 2009

Weekly Economics Lesson: High Taxes Are a Recipe for Reduced Competitiveness

Politicians understand the economic impact of taxation when it serves their interests. They often brag about raising tobacco taxes to discourage smoking. It's not their business to dictate private behavior, of course, but they are right about higher taxes leading to less smoking (they also lead to more cigarette smuggling, but that's a separate issue). Those same politicians, however, conveniently forget about the economic effect of taxes when they impose high tax rates on work, saving, investment, and entrepreneurship. Or maybe they simply don't care. But as is explained in the Wall Street Journal, taxes on productive behavior matter a lot. More than one million people have escaped New York this decade, and punitive taxes clearly have played a role in this brain drain to other states:
Between 2000 and 2008, the Empire State had a net domestic outflow of more than 1.5 million, the biggest exodus of any state, with most hailing from New York City. The departures also have perilous budget consequences, since they tend to include residents who are better off than those arriving. Statewide, departing families have income levels 13% higher than those moving in, while in New York County (home of Manhattan) the differential was even more severe. Those moving elsewhere had an average income of $93,264, some 28% higher than the $72,726 earned by those coming in. In 2006 alone, that swap meant the state lost $4.3 billion in taxpayer income. Add that up from 2001 through 2008, and it translates into annual net income losses somewhere near $30 billion. ...no single reason can be fingered for a million migrants seeking their fortunes across state lines, but one place to start is New York's notorious state and local tax burden. According to the Tax Foundation, between 1977 and 2008, New York has ranked first or second in the country for its state-local tax burden compared to the U.S. average. In the years considered by the Empire Center study, New York's state and local tax burden ranged between 11% and 12% of income. The peak year for taxes, 2004, was followed by the peak year for departures—as New York lost nearly 250,000 people to other states in 2005. And that's before another big tax hike this year. That pattern is consistent with the annual migration patterns, showing that highly taxed and economically lackluster states were most likely to end up in residents' rear view mirrors. According to the annual study by United Van Lines, states like New York, New Jersey, Michigan and Illinois have been big losers in recent years. ...Liberals continue to insist that they can raise taxes ever higher without any effect on behavior, but the New York study is one more piece of evidence that this is a destructive illusion.

The World's Best Tax Haven: In America, but Unavailable to Americans

Tax competition is an issue that arouses passion on both sides of the debate. Libertarians and other free-market advocates welcome tax competition as a way of restraining the greed of politicians. Governments have lowered tax rates in recent decades, for instance, because politicians are afraid that the geese that lay the golden eggs can fly across the border. But collectivists despise tax competition - for exactly the same reason. They want investors, entrepreneurs, and companies to passively serve as free vending machines, dispensing never-ending piles of money for politicians. So when a left-wing group puts together a ranking of the world's "top secrecy jurisdictions" in hopes of undermining tax competition, proponents of individual freedom can use that list as a guide to world's most investor-friendly nations. The good news is that an American state, Delaware, is number one on the list. And since being a tax haven is a magnet for investment, this is good news for U.S. competitiveness. The bad news is that American taxpayers are not allowed to benefit from many of Delaware's "tax haven" policies. Here's what a left-wing columnist in the United Kingdom wrote about the issue:
You're a billionaire but you don't want anyone, least of all the taxman, to know. What do you do? Head for a palm-fringed island paradise or a snow-covered Alpine micro-state? Wrong. The world's most opaque jurisdictions – the ones that will best shield you and your cash from the light – are mostly in the heart of the most sophisticated and powerful global financial centres. London, Luxembourg and Zurich are in the top five most secretive jurisdictions, according the first comprehensive index of financial transparency ever compiled. Yet top of the pile, beating the British Virgin Islands, Belize or Liechtenstein as the best place to hide wealth, is Delaware. One of the smallest states in the US, it offers the best protection for anyone who does not want to disclose their identity as a beneficial owner of a company. That is one very good reason why the East Coast state hosts 50% of the US's quoted firms and 650,000 companies – almost equivalent to one company per Delaware resident. ...Delaware – the political power-base of the US vice-president, Joe Biden – offers high levels of banking secrecy and does not make details of trusts, company accounts and beneficial ownership a matter of public record. Delaware also allows companies to re-domicile within its borders with minimal disclosure, and allows the existence of privacy-enhancing "protected cell" or "segregated portfolio" companies, among many other stratagems useful for protecting the identity of those who do business there.