Tuesday, July 31, 2012

Milton Friedman's Words Ring As True Today

If he had lived, economist Milton Friedman would have been 100 years old today.  To me, personally, Friedman was a mentor.  He, as an adviser, was what helped make Ronald Reagan so economically successful. And, to those who call themselves Keynesians,  Friedman was their worst nightmare; exposing the myth of government spending as a means of stimulating an economy.  At the same time, he destroyed the typical liberal concept that increasing taxes have no consequences.

For the most part, his economic principals emanated from a simple, old saying: "There is no such thing as a free lunch".  Friedman's use of those words to explain economic principals is as true today as when he first started popularizing them; especially, now, with Obama and Bernanke spending like the proverbial drunken sailors and, with Obama and the Democrats planning new taxes for the so-called rich.  For this reason, I present one of Friedman's many speeches.  This one titled: "The Free Lunch Myth":

 

Finally, there is this 1978 speech that Mr. Friedman gave on the impact of the government takeover of healthcare.  Again, as pertinent today, with ObamaCare, as it was in 1978.

Record Federal Disability Insurance Partipation

According to the latest reporting, the number of Americans receiving Federal disability insurance payments has hit a record 8.74 million workers.  To put this into perspective, that's nearly as many people as there are in the entire state of New Jersey.

In just 20 years, the amount of workers getting Federal disability payments has gone up by 260%.  In just the last 3-1/2 years, under Obama, that number has grown to more than 18%.   But, more importantly,  what this means is that, today, 1 in 16 workers is collecting disability payments; while at the beginning of 2009, only 1 in 19 were collecting insurance.  And, in 1987, the ratio was 1 in 42.

This near meteoric rise in the number of "disabled" presents several perplexing questions.  First of all, with all the OSHA workplace safety protections in place, why are so many people getting injured on the job?  And, if injuries are not increasing, do we now have a rabid fraud problem in the disability insurance program, or, are disabled workers getting laid off from their jobs at a higher rate than the general worker population?  If so, this would be a very broadly based abuse of the Americans with Disabilities Act of 1990; where hiring (and firing) based on disability discrimination is prohibited.  

The bottom line is that these kind of rising numbers have no logical correlation to anything.  However, what truly amazes me is that no one, in our entire government, on either the left or right side of aisle, seems to be outraged by these increases.   Obviously, this is a government program that appears to be spiraling out of control and with no apparent oversight.  All of us, as taxpayers, should be livid over this.

The primary source for the above statistics: http://cnsnews.com/news/article/8753935-workers-disability-set-another-record-july-exceed-population-39-states

Monday, July 30, 2012

Newsweek: Mitt Romney Is A Wimp

This week's Newsweek is now running this cover story that refers to Mitt Romney as a wimp:


Of course, Newsweek is the same liberal rag mag that also tried to portray George H. W. Bush as a person who was trying to overcome his supposed wimpiness.



But, the real question is whether those two guys are wimps when compared to this guy:


Lastly, let's not forget the wimpiness of "H.W." when he sky dived on both his 75th and 85th birthdays.


Note:  The above images have been reproduced on the basis of "fair use" as defined in section 107 of our national Copyright law:  "reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research.."  Further, this blog is fully non-profit.

On Successful Business Persons, The Two Faces Of Obama

Today, we have a cleaned-up, calm Obama telling us how he understands the importance of business and that certain words in his Roanoke speech two weeks ago were taken out of context:



 Now, go back  to that Roanoke speech and you have a sweaty, rolled-up shirt-sleeved and somewhat angry Obama saying these words about business:




Those words,"I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there", along with the tone and tenor that they were spoken in,  have a definite "context".   And, that "context" is one of scolding, mocking, and contempt for successful business persons. It's just that simple and the President is lying when he says otherwise.

The Roanoke speech was the true face of the obviously two-faced Obama.

The Disappearing Rich


With all of Obama's rhetoric about the rich and successful, you would think that we had a growing disparity between the rich and poor in our society.  But, in fact, studies have proven just the opposite.  During the recession years (2007-2009), the highest class of wage earners in America lost 34% of their income; according to a study conducted by the Congressional Budget Office.

                             Change in after-income tax (2007-2009)


At the same time, those at poverty levels, actually saw their incomes increase by 3%; mostly because of increases in liberal social programs such as food stamps.  Then, too, there was a wealth study done by the Boston Consulting Group (BCG) that found that the number of American millionaires fell by 129,000 in just 2011, alone.

Now, liberals might think that this "wealth redistribution" is a good thing.  But, is it a good thing that all other classes, including the middle class, lose in the process?  Also, think about this: Those losses of income by the nation's wealthiest might just be the reason that our economy is doing so poorly and jobs aren't being created.  If so, it makes no sense to erase even more of the wealthiest incomes through those higher taxes being proposed by Obama; and, through those rich-targeted taxes that are set to occur under ObamaCare in January 2013.



Sources for this blog entry:

CNBC: The Falling Fortunes of the One Percent:  http://www.cnbc.com/id/48257611

CNN: Number of millionaires see a decline in wealth: http://money.cnn.com/2012/06/01/news/economy/american-millionaires/index.htm

Sunday, July 29, 2012

The Democrats Still Haven't Learned From Their 1990 Tax-The-Rich Fiasco


In 1990, the Democrats in Congress convinced President, read-my-lips, no-new-taxes, George H.W. Bush to sign into law a luxury tax on expensive boats, furs, aircraft, and automobiles.  You know, all those things that the envious Democrats find to be disgusting toys and symbols of the rich and famous.  Blinded by their ideological zeal to punish the wealthy,  they truly thought this tax would help line the coffers of the federal government and reduce the deficit.  But, the tax backfired.  The revenues from it failed to materialize because the "rich" just stopped buying all those new toys; especially from U.S. manufacturers and suppliers.  Many went overseas or north to Canada and south to Mexico to buy them.  Then, too, they also bought used.  After all, a 10-year old Ferrari is still a Ferrari and still quite the status symbol; maybe even worth more than a new one.

In the boat building industry, alone, more than 16,000 highly paid  craftsman and workers lost their jobs.  Others, too, not directly involved in the actual boat building, like mechanics and sales personnel, lost their jobs.  Decades old, custom boat builders shuttered their doors, and some communities, who were primarily dependent on that industry, saw people move away to greener pastures; leaving it with barely any tax base to survive on.  States lost sales tax and income tax revenues.  And, the federal government lost income tax revenues from all those previously healthy boat builders and from the incomes of their workers.

Just, three years later, the Democrats and Bill Clinton quietly repealed the luxury tax.

So, here we are, again, with the Democrats and Obama wanting to sock it to the rich by extending the Bush tax cuts on everyone but the rich.  Obama says that it will bring in a much-needed $85 billion a year in increased tax revenues to reduce the deficit.  But, the rich are likely to respond, as they did in 1990, by avoiding those taxes.  Further,  that $85 billion is money that the rich won't have to spend; and, just like 1990, you can expect that some of the non-rich will pay, big-time, by losing their jobs.  That will result in higher government spending to pay for the increased unemployment claims.  In addition, the states will lose income tax revenues since state income taxes aren't calculated until after Uncle Sam takes his share; so those revenues are sure to proportionately decline.  That, in turn, will force some states to raise their own taxes to make up for the shortfalls.  And, as always: "He who ignores history is doomed to repeat it!"

Saturday, July 28, 2012

London Olympics: A Celebration of Socialized Medicine?

Only an idiot or a far left liberal would have inserted Britain's health care system into the Olympic's Opening Ceremony.  But, Danny Boyle, the very liberal producer of that very odd Opening Ceremony, did just that.  Britain's system of socialized medicine is nothing to be proud of.  It literally takes weeks to see a specialist.  Because of that, the death rate for cancer and heart attack victims is the highest in the Western world.   Emergency room waits, following an emergency or accident, can take hours.

Maybe the Brits should think about socialized mortuary and burial services with that kind of record.

Lastly, the Olympics should not be some kind of platform for politics. Didn't the world get enough of that when Nazi Germany hosted the Berlin Olympics of 1936?


Sources:

A celebration of free healthcare, the trade union struggle, the battle for women's rights and a fleeting lesbian kiss: the Olympics opening ceremony Friday did not shy away from weighty social issues: http://www.google.com/hostednews/afp/article/ALeqM5hK3ZHgHyRLFGgFylJyPxUfH0kOtg?docId=CNG.2249ee77cd214cd016f6cfc488472e87.2a1

UK cancer survival rates 'the worst in the Western world': http://www.dailymail.co.uk/health/article-2001248/UK-cancer-survival-rates-worst-Western-world.html

Britain, the sick man of Europe: Heart and cancer survival rates among worst in developed world: http://www.dailymail.co.uk/news/article-1234276/Britain-sick-man-Europe-Heart-cancer-survival-rates-worst-developed-world.html

NHS waiting lists: how long are patients waiting?  New data journalism shows exactly how much worse NHS waiting times have got:  http://www.guardian.co.uk/news/datablog/2011/jul/11/nhs-waiting-lists-data

Brian Ross: An Anti-Conservative Activist Reporter

In the early minutes following the Dark Knight Movie Massacre, Brian Ross attempted to link the Tea Party to the shooting. It appears Mr. Ross has a history of going after conservatives under the "guise" of investigative reporting.

Take, for example, his investigation of a company called Goldline; a national gold and precious metal dealer.  In that instance like his Dark Knight investigation, he announced the big breaking news on 'Good Morning America' that Goldline was being charged with 19-counts (19 different customers) of "misdemeanor" crimes associated with its selling practices.  But, it wasn't just enough to announce that the company may have to go to court to defend itself against these charges.  He made sure that the whole world knew that Goldline had the backing of several conservative heavyweights like Glenn Beck, Fred Thompson, and Mike Huckabee.   In doing so, it was clear that his intent was to connect conservatives with the alleged crimes.  Of course, I also find it interesting that Brian Ross and ABC would make such a big news announcement on one of their premier shows over a non-felony (misdemeanor) court filing in a local court in Los Angeles.  What's next? An investigation of all the speeding tickets that conservatives have gotten in a year?

Here's a link to the actual ABC New print story which includes Brian Ross' "Good Morning America" breaking news announcement video:  http://abcnews.go.com/Blotter/goldline-execs-charged-fraud/story?id=14857253#.UA8AgqNFodW

Friday, July 27, 2012

On His Comments About The London Olympics, Romney Gets A Political Correctness And Diplomacy Lesson


While in London, Romney got the Brits' hackles up when he said this about that city's preparedness in hosting the Olympics: "It's hard to know just how well it will turn out. There are a few things that were disconcerting. The stories about the private security firm not having enough people, the supposed strike of the immigration and customs officials… that obviously is not something which is encouraging."

Then, too, the Democrats, here, were aghast that Romney would offend such a special friend as the British; even though Obama did just that when he sent packing that famous Churchill bust that had been on loan from the Brits since 9/11 and was proudly on display in the White House.

Romney's problem is that the Brits didn't want to hear the truth from some would-be American President.  This, despite the fact that the British newspapers had been saying the same thing for weeks and months.  They just wanted Romney to play nice as a guest in their capital city.  So, Romney learned a serious political correctness and diplomatic lesson.  But, it is interesting that, amid all of those criticizing Romney, there is one voice of reason: Piers Morgan.  A Brit, himself, he has quickly come to Romney's defense:

Obama Says His Economic Plan "Worked"

Just 4 days ago, on July 23rd, Obama said this on his handling of the economy:



Well, if having a year by year weakening of this country's economy can somehow be described by the phrase "it worked", then, apparently, it was Obama's plan to do just that.  The fact is that, with every additional application of stimulus spending, the economy only got weaker.  In the 3rd quarter of 2009 -- the 1st quarter following the end of  the Great Recession with hardly any stimulus monies being applied -- the economy went positive and grew by 3 percent.  Then, the 4th quarter clocked in with the fastest growth rate in six years at 5.7 percent.  And, again, all this with only limited stimulus spending.  Those two quarters, combined, meant that the economy grew by 4.3 percent in the last half of 2009.  In 2010, the growth rate fell to a level of just 3 percent as the bulk of stimulus money was being applied.  2011 saw even less growth at 1.8 percent.  With this morning's release of data, we now know that, annualized, the economy only grew by 1.5 percent in the second quarter. 

So in summary, the "it worked" statement goes like this: 4.3% (last half 2009), 3% (2010), 1.8% (2011) and, now, 1.5%. 

Story on this morning's economic growth: http://www.washingtonpost.com/business/economy/gdp-us-economic-growth-slowed-to-15percent-in-last-3-months/2012/07/27/gJQAK8diDX_story.html

Thursday, July 26, 2012

Jobless Claims Fall Sharply On Seasonal Adjustments

This morning, jobless claims fell by 35,000 after rising by 36,000 in the previous week.  The Boston Globe (Boston.com) said this:  "benefits dropped by 35,000 last week, a figure that may have been distorted by seasonal factors".  The operative word in that statement is "distorted".  Then, the "Globe" went on to say: "Applications surged two weeks ago, reversing a big drop the previous week. But economists caution that the government struggles every July to account for temporary summer shutdowns in the auto industry."  In this case, the operative word is "struggles".

The problem with the government tinkering with the jobless claims number by using "seasonal" adjustments is that it is too open to tinkering for political reasons.  But, more importantly, in a day of widespread computerized data management, it seems impossible to believe that we are still having to estimate claims based on samplings and on seasonal adjustments.  Theoretically, there's no reason why the government couldn't have the actual numbers; on any day; and, in real time.  Why aren't all this nation's claims offices being locked into a single database?

The other problem I have is the concept of seasonal adjustments being singularly done for the auto industry.  These adjustments are probably not needed anymore.  They are hangovers from the days when the auto industry was the major employer in the country and at a time when almost every car sold was made here.  And, every year, the Big Three (Ford, General Motors, and Chrysler), for competitive reasons, would do a complete or major redesign of cars.  This, in turn, necessitated long shutdowns of the manufacturing facilities for retooling; every July.  The laid off employees would then apply for unemployment benefits. Also, today, many of our so-called American autos are made in places like Canada and Mexico.

Today, those major redesigns just don't occur with any regularity.  For example, the PT Cruiser, which was in production from 2001 to 2010, changed very little in all those years.  The Chevy Cruze and Volt, which share the same body style and frame, have not changed for the last three years.  Furthermore, automobile manufacturers are no longer following the tradition of introducing their "all new models" in the Fall of every year.  You can buy the "all new" 2013 Nissan Altima; right now. And, the Altimas are either made in Smyrna, Tenn. or in Canton, Miss. and I'm quite sure that the government didn't seasonally adjust when those plants were shut down for retooling; early this year.

The point that I'm trying to make is that these "seasonal adjustments" make no sense anymore; and, quite simply, they are as the Globe said: distortions.

Boston.com story: http://www.boston.com/business/markets/2012/07/26/jobless-claims-drop/kRT7wGdwrxQkRrtbkVgLDP/story.html

Do Obama's Polling Expenses Reveal Panic?

In 2008, the Obama campaign spent, on average, $1.5 million per month in polling expenses and surveys.  This year, the monthly average is about $2.5 million; with $2.6 million being spent in June, alone.

Certainly, if the Obama campaign was confident of winning, it would be polling more in line with 2008.  But, this big and consistent increase in this expense reflects a lack of confidence; maybe even panic.  Just like a man who is constantly looking at his watch when he's knows he's definitely going to be late in getting to an important meeting or appointment.

Wednesday, July 25, 2012

Most Criminals Don't Carry Assault Weapons To Commit Crimes

Since the Dark Knight Movie Massacre,  there have been increased cries from extremists to ban all guns in the U.S. The more moderate of the gun control advocates are only calling for a ban on assault weapons;  citing that the only reason for these kinds of weapons is to inflict mass murders and casualties.

However, most crimes and murders in this country are not committed using assault weapons.  That's because, in general, assault weapons are a little too big and a little too hard to conceal.  Only on fictional TV dramas and in the movies do you really see "big action" crimes being committed with a lot of automatic weapons.  When assault weapons are used in real life, those crimes are "generally" gang-on-gang shootings or shoot outs like the famous Valentine's Day Massacre.  That's not to say that assault weapons are never used against non-criminals and police;  In 1997, in Van Nuys, California, there was a nationally reported, commando-style bank robbery by two men using assault weapons that resulted in a 40 minute standoff with the police where more than 1,700 rounds of ammo were expended.

The use of assault weapons in extreme, violent killings such as Columbine or The Dark Knight Movie Massacre are rare and are committed by the mentally unbalanced of our society.    I guarantee you that banning these weapons will only force these people to use other means to kill.  Most people are either too young to remember that one of the worst mass killings in this country occurred due to the actions of Andrew Kehoe who, in three separate bombings, murdered  38 children and 6 adults; all over his anger about property taxes.  As, noted before in this blog, countries that have some of the strictest gun laws have almost all experienced the kind of events that occurred in Aurora, Colorado.  Just last year, in Norway, Anders Behring Breivik killed 77 people; mostly teenagers.  This in a country that bans all civilian use and ownership of assault weapons or automatic weapon of any kind.

How Bad Was The Economy In the 2nd Quarter?


On July 27th, the federal government will release the initial data that reflects the economic activity of this country for the second quarter of this year.  That data, the growth in Gross Domestic Product or GDP, was originally expected to be about 2% in growth.  But, in each of the 3 months that comprise the 2nd quarter, retails sales activity  fell consecutively and, unexpectedly.   A fact that hasn't happened since 2008; at the height of the so-called Great Recession.  Now, economists have lowered their estimates; with economic growth slowing to between 1 and 1-1/2 percent.  But, I think they're still wrong; and, it all has to do with high gasoline prices.

In two of the three months that made up the second quarter, April and May,  oil prices were rising rapidly; with many cities seeing $4+ gasoline.  The reason that this is important to note is because gasoline prices are part of the overall retail sales numbers.  For that reason, higher gas prices have always helped to push up the retail sales data.  But, instead, retail sales fell in both April and May.  So, this means that those high gasoline prices were actually making those negative retail sales numbers look a lot better than they really were, and, I don't think economists are taking this into consideration when estimating the growth in GDP.  For that reason, it is highly possible that 2nd quarter GDP growth will be lower than 1%.  If so, this would be a really horrible number at near-recession levels.   Of course, the numbers could wind up being better than expected since the group putting the numbers out, the Bureau of Labor Statistics (BLS), reports to Obama.  After all, the BLS will have two more monthly attempts to get the numbers right.

Tuesday, July 24, 2012

No, Mr. President, The Government Didn't Invent The Internet

As part of Obama's dumb "you didn't build that" speech, he also made the comment that "government invented the Internet".  For Obama to say that is like saying that the first person to "buy" an Apple computer was the one who invented it.

We can all thank a high-tech company out of Cambridge, Mass for developing the concept of "packet switching"; which is at the heart of what we know, today, as the World Wide Web or the Internet.  That company, "Bolt, Beranak, and Newman" (BBN) was founded by a bunch of brainiacs who left MIT.  One of their earliest business ideas was to "invent" a network as an alternative to the then-technology of having expensive,  dedicated, high-speed telephone lines between any two computers that needed to exchange data.  At the same time, they wanted their network concept to be "fault tolerant"; meaning that two computers could  still communicate despite having one or more telephone lines out of service.

What they ultimately invented is known today as a "packet switched network".  And, besides being the basis of the Internet, packet switching also allows WIFI and local area Ethernet networks to exist.  But, back then,  the BBN guys needed a customer, and because of the cost, they knew they needed a customer with deep pockets who had a "need" for such a network. They theorized that the military would be  a great target for their idea.  So, they approached the Defense Department with their concept and they ultimately went on to "build" the first packet switched network for the military; called the ARPANET.  This is what Obama mistakenly thinks was the invention of the Internet.  But, ARPANET is only conceptually like the Internet.  Operationally, they were two different animals; with the Internet using a more efficient and ubiquitous form of network switching that is based on Domain Names for its routing.

The fact is that the Internet was built in parallel to the ARPANET.  Eventually, the military dumped ARPANET in 1989 in favor of the widely flourishing and more accessible Internet.  So, you see Mr. President, the government didn't invent the Internet.  The private sector built that!  Government was just the first customer.

Election Year, Gun Control Politics

Well, it was to be expected.  With the Aurora, Colorado, Dark Night Movie Massacre, it was a sure bet that we would hear renewed calls for national gun control; mostly from the left.  In fact, before there were any real details of the shooting, the "control" cries were ringing out. This always happens.  Every time we have a single, serious shooting event, the gun control advocates hit the airways.  I personally remember L.B.J calling for gun control in 1966; following the Texas Clock Tower shootings.

But, all this is so much politics. Unless we get an amendment to the constitution, which limits gun ownership, we will always have guns in America; both legally and illegally.   Statistically, it is estimated that one out of every 4 Americans owns guns; with each possessing and average of 4.   So, in effect, there is one gun in America for every man, woman, and child in our population; or, about 312 million of them.  And, that's just the legal ones we know of.   So, logistically, with that many guns in existence, it would a literal impossibility to disarm the country.

What I really find interesting is that the Democrats, who are now calling for national gun control, have been silent over what has been happening in the Democrat-controlled, city of Chicago for months.  In this year, alone, that city is on track to clock 400 or more shooting deaths; mostly in the black communities of the city.    I ask you.  What is worse?  A single event where 12 people die or, multiple events where more there are more than 12 deaths every 12 days?  But, you see, politically, the Democrats don't want to talk about Chicago.  That's because Chicago has the strictest gun control laws in the country.  Yet, it has one the worst homicide records.   And, for sure, they don't want to highlight a problem like that in what is a bastion of Democrat politics.

We don't have a gun control problem in this country. We have a violent media control problem.  We now know that the Columbine shooters were heavily influenced by violent, first-person-shooting, video games.  And, I am quite sure, that, when it is all said and done, the Aurora shooter was heavily influenced by the Batman and Dark Night series of movies and/or comic books.   As a country, we foolishly seem to believe that, if we just label TV programs, movies, or video games as being violent, everything will be OK.  But, that's just as ridiculous as believing the health warnings on cigarette packages will wipe out smoking.  The fact remains that some unstable people will immerse themselves in violent media; ultimately wanting to act out that violence.  Gun control isn't going to prevent them from performing a violent act.  If someone like that can't get access to a gun, they'll find another means to kill.  It wasn't guns that Timothy McVeigh used to kill  people, and, certainly, it isn't guns that kill American soldiers when an IED goes off in Iraq. In countries that ban guns, all together, the murder rates by other means are actually higher, on a per capita basis, then in the U.S. for all means.

The bottom line is that we are losing our moral fiber, and, violent media contributes to this deterioration.  I just wish that our Democrat friends would start taking Hollywood and video game makers to task. But, unfortunately, the Democrats are too locked into campaign funds from these people.

Source on higher murder rates in counties with gun bans: http://theacru.org/acru/harvard_study_gun_control_is_counterproductive/

Monday, July 23, 2012

Every American Should See This Campaign Ad From Senator Scott Brown

The False Argument That Clinton Raised Taxes On The Rich And The Economy Boomed

With Obama running around calling for increased taxes on those making $200,000 individually, and on families making more than $250,000, there are those, including the President, who are mis-characterizing what actually happened to the economy in the nineteen nineties when Bill Clinton was in office.

It is true that when Clinton took office in 1993, he and the Democrats in Congress raised the top marginal tax rate of the highest income earners from 31% to 39.6%.  And, it is also true that the economy did well despite the higher taxes on the rich.  What people are ignoring are two critical economic events in the 90's that helped offset the deleterious effects of that tax increase: (1) the implementation of the North American Free Trade Agreement (NAFTA) on January 1 of 1994 and (2) the Dot-Com boom; starting in 1995.

NAFTA alone has seen our inter-North American trade triple since 1994.  The Dot-Com boom created more millionaires and businesses than any other time in our nation's history.  So, to paraphrase Mr. Obama on Clinton's success:  "He didn't do that, someone else made it happen!"

One last point.  The so-called budget surpluses that Bill Clinton created came about because of Newt Gingrich's Contract With America; announced during the 1994 election process.  Once the Republicans took over Congress, they worked with Clinton on the passage and implementation of several bills in 1995-1996 that were designed to reduce federal spending.  As a result, the country went into budget surpluses; starting in 1998.  Any Democrats claiming that Bill Clinton's taxes on the rich created a better economy and reduced deficits is just an attempt to re-write history. It should also be pointed out the the economy did better under the Clinton deficit reduction years than any of the Clinton years prior to that.






Sunday, July 22, 2012

ABC & Brian Ross Thought They Finally Nailed The Tea Party

Every time there's some type of major shooting event or foiled terrorist plot, our left-wing, main stream media and liberals in general go out of their way to connect those events to the conservative Tea Party movement.  They did it with the Gabby Gifford's shooting, by trying to connect the shooter, Jared Loughner, to Sarah Palin and the Tea Party; when, in fact, Loughner was probably more a liberal than a conservative.   In 2010, after a failed car bombing attempt in Times Square, there was no end in trying to connect the Tea Party to that event as well; even though there was no basis for the claim.  It was pure liberal speculation that was clearly intended to try and turn the country against the conservative movement.

Then, there was this horrific mass killing in Aurora, Colorado.  As soon as the name of the shooter was released, Brian Ross and his people jumped on finding out as much as they could about the perpetrator.  The name of the shooter was James Holmes; of which there are 38 in Colorado.  But, Mr. Ross zeroed in on one man named: Jim Holmes, a Hispanic male living in Aurora who's name appears on a Colorado Tea Party site.  How, they found this "Jim Holmes" is anyone's guess.  Maybe they started out by Googling:  "tea party james holmes aurora colorado".  Anyway, they must have been tripping over themselves to go on the air with George Stephanopoulis to get the "real" news out about the shooting during that morning's run of ABC's "Good Morning America".   And, for sure, they must have been dancing around with high-fives to everyone; believing that they finally nailed the Tea Party as a subversive group.  

Unfortunately for the Jim Holmes of Aurora, Colorado, Brian Ross and ABC had the wrong guy.   Of course, much later, long, long after it was obvious that Ross' Jim Holmes was not the shooter, he issued a quick and short apology.  But, to the many that heard the original report, the shooter was still connected to the Tea Party.   Issuing an apology, later in the day, with a possibly different audience in not good enough.  That apology should be repeated at the very time and on the show that it occurred.   This is so typical.  Whenever a lefty newspaper, like the New York Times, thinks they've nailed some Republican, they splash it all over page one.  But, when they're wrong and have to issue a retraction, its always buried deep inside the paper.   


Stuff like this that makes it twice as hard for Republicans to win or get their message out.  It is a shame we don't have an honest reporting of the news.

Obama's Arrogant Putdown Of Successful Business People

In his now infamous "you didn't build it speech", Obama said this of successful people:



To me, this was one of the most arrogant and anti-American words ever spoken by a U.S. president about the very foundation of America's success as a nation.   He didn't just make a simple statement.  He sneeringly derided those who claimed that it was their hard work or that it was their being smart that made them successful.  And, you got a sense of his envy and distaste of successful persons he's met because you could hear it in the tenor of his words: "because I'm just so smart" or "it must be because I worked harder than anyone else."  It was like listening to an angry, jealous kid.

But, what is truly amazing about those comments is that Obama surrounds himself with all kinds of rich and successful people, like Steven Spielberg or Warren Buffet, and, without consequence, he openly puts those people down in a cheap and childish fashion.  Even more amazing than that is that our so-smart president doesn't seem to understand that there's "more" to being successful than just being smart or just working hard; and, that "more" has nothing to do with government, an inspiring teacher, or a bunch of roads and bridges. The fact is that successful people have certain traits that are even more essential than just hard work and intelligence.

Almost every successful person has a well developed sense of observation.  They always see business opportunities where others see nothing.  And, when they do succeed in those opportunities, others will often say: "Why didn't I think of that?"  But, beyond this, they are all good problem solvers.  Their problem solving ability helps them to establish goals and a pathway to achieving that vision of theirs.   Then, too, they're all risk takers; often using every ounce of money they have to achieve their goal.  Lastly, almost every successful person has excellent communication and interpersonal skills. Or, in other words, they're all great salesman.  Because they have to be to sell their ideas to others.

All these skills, combined, are what American exceptionalism is all about. It's those skills that built this country; not government; not roads; not teachers.   Business didn't grow out of government; as this President would imply.  The fact is that government wouldn't exist without business.   There would be no tax revenues.  No people working. If anything, government is an impediment to business. Something Obama can't seem to fathom.

Saturday, July 21, 2012

Dodd-Frank: Laws Are Always Made To Be Broken

This country has millions of laws and millions of people who have broken them.  Laws don't necessarily prevent crime, they only make sure someone pays for it; always after the fact.  That is...hopefully!

The same is true with the Dodd-Frank financial reform act.  For those who think that we'll never see another "too big to fail" or major banking or financial failure with Dodd-Frank laws in place, are just whistling past the graveyard.  We've already seen several since that act went into effect.  There was the Jon Corzine/MF Global bankruptcy and liquidation whereby investors lost $1.6 billion in assets.  Then, there was the big trading error at JP Morgan where a still-undefined billions of dollars went lost.  Of course, in the last two weeks, there was the Barclay's LIBOR rate manipulation scandal that Federal Reserve may have been aware of as early as 2007.  And, most recently, there was the bankruptcy of the commodities and futures trading firm, PGBest, where a 1/4 billion dollars of investors money just went missing. 

In each of the above cases, our always-on-top-of-things lawmakers have either held or will hold hearings.  Of course, all after the fact.  But, to date, no one has ever been convicted of anything; and, probably never will be.  Just as there has never been a conviction associated with the housing collapse and banking failures that were responsible for the recession that started nearly 6 years ago.  That's why the Dodd-Frank reform act was just a show; written by the two Democrats who's actions in the Senate and House banking committees may have created some of the conditions that lead up to the Great Recession.  But, we will ultimately find out that Dodd-Frank was overkill; just adding layers upon layers of nightmarish regulations to already heavily regulated banking and financial system.  The financial and banking failures will continue to pile up; some because people or companies found legal ways to skirt the law.   Eventually,  Dodd-Frank will have to be replaced with something else. Just as Dodd-Frank replaced other previous regulations.

But, the fact will remain: Those who play by the rules will continue to do so.  Those who don't, won't.   And, no matter what the law or how many laws we have in place, it will always be too late when we ultimately find out that a law has been broken.

Friday, July 20, 2012

Mortgage Resolution Partners: Bringing Down The House

A company out of left-wing San Francisco, called Mortgage Resolution Partners (MRP), has concocted a grand scheme to use a community's eminent domain power to seize either underwater or near-foreclosed-on homes from the title holders so that the person or persons living in that home can remain there with a new, lowered mortgage rate that is based on a court-determined, "fair value" of the home.  Of course, the new mortgage would be provided by MRP.   As a result, the bank or financing entity, that originally provided the mortgage and held title to the house, is screwed in the process; winding up with just pennies on the dollar for their investment.  But, MRP doesn't care.  That's because the partners in MRP are a bunch of liberals who blame the banks for all the mortgage/foreclosure problems of today.   In fact, the chairman of MRP, Steven Gluckstern, is a major Obama campaign funds bundler.  Another partner, Graham Williams, pioneered low-income home loans at the Bank of America; a primary reason we even had a housing collapse. Now he thinks he can fix the problem that he helped create with another liberal, screwball idea.

If you think this sounds all too Gestapo-like, your right!  But, more importantly, expanding eminent domain to seize property from one private entity to give it to another private entity is a complete bastardization of the eminent domain laws and the American concept of fairness and fair play.  What's next?  A mayor taking away your home so he can give it to his buddy or campaign donor to sell at a profit?

For sure, most liberals might think that keeping people in their homes, at a much lower cost, is a good thing.  But, what they fail to understand is that there are all kinds of negative consequences to using eminent domain is this way.

First of all, there's the issue of "fair value" versus market value.  Under eminent domain laws, the state or community, which exercises eminent domain, is only required to pay the real owner of the property the "fair value" of that property.  And, fair value is a subjective number that would be determined by a judge who is assigned to mediate the eminent domain process.  Hardly ever is the fair value equal to the market value. Typically it is thousands lower than what the property could be sold for.  That's because judges usually side with the state or community in determining what it should be.  So... What happens when a house is re-mortgaged at fair value?  Well, the transaction price then becomes part of the public record.  Immediately, all the homes in the area of similar size and type will see their home values lowered to that fair value.  Other homes will be adjusted downward on an equivalency basis.  And, if this process is continued, over and over, again, it will substantially drive home prices downward in spiral fashion; with some of those original eminent domain home owners seeing their mortgages underwater again.   At the same time, communities that collect home-value-based real estate taxes will see their tax revenues fall.  As a result, those communities will have to do what they have always done: Raise taxes on everyone to compensate for the losses.  So, in general, everyone will suffer in the process of saving a few from their mortgage problems.

Then, there's the impact on the mortgage lending industry, itself.  Eminent domain seizures will only increase the number and amount of losses in the banking and financing industries.  Those losses will probably result in lowered interest payments to any account holders or, in higher fees to customers. This will also introduce a new risk into making home loans.  As a consequence, mortgage lending requirements will only become tighter than they are today.  Lending rates will go higher and requirements for down payments will become more demanding. Other lenders may just stop giving out home loans, altogether. And, all this will stymie the home buying market; resulting in even lower home prices because the unsold inventory of homes will expand for lack of any easier mortgage lending. In some cases, the losses associated with the eminent domain seizures may cause bank failures; resulting in the FDIC having to step in to cover any valid commitments.  When that happens, all of us, as taxpayers, will pay for the actions of Mortgage Resolution Partners.

As it stands right now, two cities in California (Of course!) are considering MRP's scheme: Fontana and Ontario.   Now, if they proceed with this, it won't be very long before other communities in California and across the U.S. will follow.  This eminent domain use could literally create a whole new housing crisis.  Just so a bunch of San Francisco liberals can, once again, ideologically punish businesses; and, line their own pockets at the same time. 

Story link: http://www.foxnews.com/us/2012/07/16/calif-cities-eye-plan-to-seize-mortgages/

Wednesday, July 18, 2012

Sorry, Mr. President. Government Doesn't Create Success.

Last Friday, President Obama made the most ridiculous claim that "If you've got a business, you didn't build that...someone else made that happen." 



Of course, in Obama's socialist mindset, that "someone else" that "made that happen" is primarily government.  Government who built the roads and bridges that enabled customers to come to your door or that let you send your products to market.  Therefore, it is only fair that you "give back" by paying higher taxes.

Well, Mr. Obama, you've got it all backwards.

Most of the roads that exist, today, were born out of the need for people to interact with private business.  Every main street in America owes it's roots and earliest roads and bridges to the entrepreneurs who took a chance and opened a saloon, a feed store, a restaurant, or hotel near a community of settlers.  There was no government in these startup communities.  Often, it was those early businesses that provided the town with protection by collectively hiring a sheriff; sometimes only offering the sheriff room and board as compensation.

The same is true today.  Many new roads  are built because an enterprising person or company decides to build an industrial park or a new housing development.   The local government is more than happy to build the required new roads because it knows that new homes and new businesses will result in higher tax revenues and new jobs for its people. It's those higher revenues that will then fix the old roads and repair or replace old bridges, build or repair schools and so on.

The President cannot seem to understand that government only exists because of successful businesses.  Without business there would be no jobs and no income for the government to tax and to develop things like the early Internet; r putting men on the moon.





When It Comes To Teacher's: More Isn't Better


For years, Democrats have pushed for smaller class sizes; arguing that a better teacher-to-student ratio would produce a better educated America.  And, a better educated America would mean better jobs and increased economic growth.

So, over the last 40 years, the number of teachers and teacher's assistants has literally doubled while school enrollments have only increased by less than 9 percent.  Now, if the Democrats were right, we should have seen increases in student performance in certain critical and job-essential areas of education.  Yet, in math and reading, the testing has shown a near zero improvement.  Science skills have declined. High school graduation rates have dropped.  Or, in other words, the teachers unions benefited from reduced class sizes while the students were short-changed.  Then, too, these facts easily dispute Obama's argument that we need to save teacher's jobs by implementing his jobs bill.  Just like a lot of what Obama wants do, that would be a pure waste of money.

Source: Andrew Coulson's 'America Has Too Many Teachers'
link: http://online.wsj.com/article/SB10001424052702303734204577465413553320588.html?mod=googlenews_wsj

Tuesday, July 17, 2012

Obama's "Return To Tax Rates Under Bill Clinton" Lie

In almost every speech the President makes regarding the killing of the Bush tax cuts for the rich, he claims that all he is trying to do is change their tax rates to what they were under Clinton.  But, this a lie.

Under ObamaCare, there are 18  new taxes and tax increases that are, in a large part, aimed at those making $200,000 individually or at families making more than $250,000.  That same group that Barack Obama would target by killing the Bush tax cuts for the rich.

First, there is a nine-tenths of a percent increase in the Medicare taxes that are already being paid for by that $200k+ income group.  But, this is not a traditional income tax; which is imposed after deductions.  This tax is applied to unadjusted gross wages.   Iit is the equivalent of raising the income tax on the rich by 2% or more.

Then, too, there's the 3.8% investment tax that no other group will see.  Under the current laws, any person who sells a home at a profit won't have to pay a capital gains tax on those profits as long as they buy another home at an equal or higher value.   But, under ObamaCare, any profits made from home selling for high income earners will be hit with a surtax of 3.8%.  And, this 3.8% tax will also be added to all existing rates for any investment profits; including dividends and interest earned.

In addition, many extremely high income earners are self-insured when it comes to paying for their health care.  For that reason, it is highly likely that they will be hit with the Individual Mandate Tax of $900 a year.  Then, too, many wealthy have Cadillac insurance plans.  These plans give them goodies like private rooms when they are hospitalized and access to the best physicians and specialists.  The ObamaCare tax on those plans is a 40% excise tax.

On top of all the aforementioned taxes, the rich will also have the pleasure of experiencing all the other tax and related cost increases that the rest of us will experience.

Monday, July 16, 2012

Obama Proves, Once Again, That He Doesn't Understand Business

In announcing his plan to let the Bush tax cuts for the rich expire at the end of the year, the President mentioned that he will keep in place those tax cuts that will benefit 97% of all small businesses.  But what he didn't mention is that the remaining 3% that will lose the Bush tax cuts, amounts to about 1.2 million small businesses.  Also, that 3% generates 91% of all small business income. Obama acts as if of these businesses won't  miss that money or be adversely affected by the tax increase. This is total ignorance of how small businesses operate and use those profits.


Small business owners just don't  take their profits and  head off to the nearest casino to have some fun.  Most plow their after-tax profits back into the operation or they put it away for that inevitable rainy day.  When they do hire an employee, they use those profits to not only pay that employee's salary but, also, to outfit or equip each new worker.   The best example of how Obama's plan would severely hurt a small business is that of the family farm. Farming is boom and bust activity.  One year, they may make more than $200,000. But, the following year, they may lose the entire crop to floods or drought.  So, farmers always pack away as much money as they can to cover those unproductive years.  Furthermore, farmers don't see profits until the crop is actually brought in.  Until that time, they have to live off multiple years of profits in savings accounts. And, the expenses are high.  In a study done by the University of Iowa, the average farmer had both fixed and operational costs in excess of $438,000 in 2008.  So, obviously, a farmer has to have a minimum $438,000 in the bank; just to cover the potential of losing the following year's crop.  And, that doesn't include the salary they need to live on. But, Obama's plan would take a minimum of $6,000 a year away from that farmer for every year he makes more than $200,000.  So, when you're talking about an annual operational cost of $438,000 dollars, you might be talking about the difference between a farmer staying in business or going into bankruptcy.

Only a fool would think that raising taxes has no consequences.  Generally speaking, raising taxes has one of two results: (1) higher prices for the things that we all buy or, (2) businesses going belly up because they can not longer compete. And, the latter always ends in higher unemployment.

References:

Small Business Statistics: http://dailycaller.com/2012/07/10/obama-tax-hike-would-affect-1-2-million-small-businesses/

University Of Iowa Farm Study:  https://www.extension.iastate.edu/agdm/wholefarm/pdf/c1-10.pdf

Sunday, July 15, 2012

Sitting Will Kill You! Down with Chairs!

Recently, there was a study that concluded that sitting for more 3 hours a day could result in your life being shortened by two years or more.  Does this now mean that New York City Mayor, Michael Bloomberg, will now ban chairs along with sugary drinks?  Does it also mean that, along with a tanning bed tax, ObamaCare will have to impose either a chair tax or a butt tax in an effort to extend American lives?  OK all you nanny-staters, get off your asses and do something about this!

Story link to CBS News: http://www.cbsnews.com/8301-504763_162-57469377-10391704/sitting-less-than-3-hours-each-day-may-tack-2-more-years-onto-your-life/ 
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Saturday, July 14, 2012

Why Romney Was Booed At The NAACP Convention

Over and over, the media has replayed the point in his speech where Romney said he would repeal ObamaCare, and then, many in the crowd booed.   But, the reason they booed was because 1/2 of all blacks would probably get free health care under the plan.  That's because the expansion of Medicaid would take the current 25% of all blacks being served by this program to a level of near 50%.  However, those who booed don't seem to understand that free comes with a penalty.  Free means that the remaining 50% of those who aren't on Medicaid, are going to have to ante up to provide the other half with free care.  Free also means that those receiving Medicaid are going to wind up being herded into low-quality, high volume health care outlets like walk-in clinics because an ever increasing amount of doctors will stop treating Medicaid patients. And, when using those clinics, they might wait hours for their immediate care and weeks to see a specialist; assuming any specialists will even take Medicaid patients in the future.

The membership of the NAACP might better serve the black community by thinking through all the negatives that come with socialized medicine.

Friday, July 13, 2012

Why The 40% Cadillac Health Plan Tax Will Utimately Hit Millions Of Middle Class People

Under ObamaCare, any individual health plan that costs $8,500 or more a year or, any family plan that is in excess of $23,000, will be hit with a massive 40% surcharge for being a so-called Cadillac plan.  And, in typical Democrat fashion, ObamaCare has no automatic way of adjusting these threshold numbers for inflation.  So, that means that, along with the AMT fix and doctor's fix, Congress will have to constantly pass legislation to adjust these numbers for inflation.

But, here's the thing.  Last year, the Kaiser Foundation reported that the average cost to an employer for  an individual health insurance plan was $5429.  For, a family, it was $15,073.   And, both these numbers were  an increase of 9% from the previous year. But, last year's bump of 9% was, hopefully, a one-time event; primarily attributed to some of the mandates of ObamaCare.  However, rates are still expected to rise by 5.8% per year through 2020.   What that means is that, by 2019, just 6-1/2 years from now, the "average" employer-based insurance plan in America will automatically become a Cadillac plan; subject to a 40% surcharge.  And, of course, that's an average of all employer plans.  Some more costly plans, such as private insurance and those in states like New York, will reach "Cadillac" status much earlier than 2019.

How's that for one helluva Obama tax on the middle class!


Insurance cost source: http://www.kaiserhealthnews.org/stories/2011/september/27/employer-health-coverage-survey-shows-employer-spending-spike.aspx

Cost projections source: http://healthaffairs.org/blog/2011/07/28/u-s-health-spending-projected-to-grow-ercent-annually/

Thursday, July 12, 2012

The Big Drop In This Morning's Jobless Claims Was Due To 4th Of July

Two years ago, on the 22nd of July, I wrote this:  

It Was All Because Of A National Holiday, Stupid!

As I had predicted three weeks ago, the jobless claims would fall following the three-day, Fourth-of-July holiday. Also as predicted, the economists would be shocked (as in the case this morning) when the jobless claims jumped significantly to be greater than expected (Click here to See Story: Jobless claims rise more than expected last week). Actually, the claims number jumped to 464,000 from the "expected" consensus of only 445,000. And that number was markedly higher than last week's reported 427,000.
Well, this morning the jobless claims fell by a shocking 26,000 claims.  And, of course, the experts seemed to be grasping at straws, like fewer auto plant closures, to explain the drop.  But, as I had indicated in the headline of my July 22, 2010 blog entry: "It Was All Because Of A National Holiday, Stupid!"  And just like 2010, you can expect the jobless claims to rise again to their usual lousy levels.

Story on the claims drop: http://www.businessweek.com/news/2012-07-12/jobless-claims-in-u-dot-s-dot-plunge-as-fewer-auto-plants-shut-down

Did Government Buying Boost GM's Sales To Make Obama Look Good?

Last quarter, General Motors (GM) sales were reported being up by a whopping 16%; making Obama's "masterminding" of the GM bailout look like a miraculous turnaround for a company that had almost gone belly up.  And, of course, Obama has taken every opportunity to promote GM's success story as his own; while on the campaign trail. In fact, last week's three-day bus tour through Michigan, Ohio, and Pennsylvania was dedicated to doing just that.

But, if you drill down into that 16% increase in sales, you would find that the federal government's fleet purchases of GM autos actually rose by an extraordinary 79% in June; just days before the second quarter sales numbers would be tallied.  How convenient that was for his bus tour and for this supposedly "most transparent" president in the history of the United States!

Fleet Sales data source: http://nlpc.org/stories/2012/07/05/gm%E2%80%99s-government-sales-and-truck-inventory-rise

Bus tour story: http://www.detroitnews.com/article/20120705/AUTO01/207050337/1121/auto01/Obama-bus-tour-to-tout-car-sales

Jesse Jackson Jr. Is A Public Figure -- Not Entitled To Invisibility

On June 10th, Jesse Jackson Jr. disappeared from the public scene.  Initially, it was reported that he was suffering from exhaustion.  Last week, NBC said they found him at an Arizona rehab facility; being treated for alcoholism.  But, this morning, the Jackson camp said "no" to NBC's claim and said that he's being treated for a "mood" disorder.  But, understand, a mood disorder is an umbrella term for a wide range of mental illnesses; some of which are not necessarily treatable with simple therapies.

Whether or not he's an alcoholic or he has a "mood" disorder, he is a U.S. Representative and the people he represents need to know what going on  He cannot be invisible. For over a month, now, he has not fulfilled his responsibilities as a member of the House of Representatives.  And, the fact that his people are being so secretive, just fuels the speculation that Jackson has something seriously wrong with him.

NBC story on Jackson: http://www.nbcchicago.com/blogs/ward-room/NBC-News-Report-Jesse-Jackson-Treated-For-Alcoholism-Addiction-162131135.html

Obama's Straw Man Argument For Not Extending Tax Cuts For The Rich

Barack Obama knows that increasing any taxes, even for the rich, will further damage this weak economy.  That's why, in 2010, when the economy was stronger than it is today, and, when he had complete control of  Congress, he chose to extend "all" the Bush tax cuts for two more years.   He could have easily done what he is now suggesting; which is to extend them for everyone "except" those making more than $200,000, individually, and any families making more than $250,000.  But, this is an election year; and, Obama is trying to set up a straw man argument in order to bait the Republicans into defending an extension of the Bush tax cuts for the rich.

Politically, I'm sure that he thinks he can achieve an electoral advantage by aligning the Republicans with the one percent who are rich and by having himself emerge as the protectorate of the 99% who are not. Simply, it's a continuation of his class warfare politics.  It also takes the focus off his miserable stewardship of the economy and our high unemployment.  Also, think about this.  Would raising taxes on the rich grow the economy or reduce unemployment?  Of course not.  In fact, it would do the opposite. That's why Obama's whole argument is more about him getting reelected and not about helping this country.


Wednesday, July 11, 2012

Mr. President, It's Tax Increases. Not, Tax Cuts For The Rich

Whenever Obama talks about taxes on the rich, he always talks in terms of "tax cuts for the rich."  That's intentional because using the words "tax cuts" makes it seem as if the rich are getting away with something.  But, in reality, Obama wants to raise taxes on the rich by extending the Bush tax cuts for everyone but the rich.   And, as far as the rich getting away with something, the top forty percent of all wage earners -- the people that Obama wants to target with his tax increase -- already pay 84.3% of all the taxes.  Then, too, Obama says these people aren't paying their fair share.   But, what is a "fair share"?  "Fair share" is a relative term.  What might seem fair to one person, could also seem highly unfair to another.   I could say that the 52% of this country who are not paying any taxes aren't paying their fair share.  In fact, I could easily say that they aren't paying any share.

Obama's targeting of the rich is an old socialist theme.  It also shows that Obama has a deep-seated envy and hatred of the rich.   Yet, without the "rich," those 52%, who don't pay taxes, wouldn't be able to enjoy their free ride.

Source of statistics: http://constitutionalconservative.wordpress.com/myth-the-rich-dont-pay-their-fair-share/

Tuesday, July 10, 2012

The Deceptive Argument That Bush Was Losing 750,000 Jobs A Month Before Obama Took Office

Over and over, again, Democrats, such as the DNC Chairperson, Debbie Wasserman Schultz, keep repeating the fact that, before Barack Obama took office, George Bush was losing 750,000 jobs per month; somehow thinking that, by quoting that job loss number, you would believe that Obama had managed to turn around a terrible unemployment situation.

But, what is not being told is the fact that the unemployment rate was still only 7.2% when Bush left office.   From there, the unemployment rate rose to a 26-year high of 10.2% under Obama.  This despite the fact that he had promised that his stimulus package would keep the rate below 8%.  Yet, for the last 41 months in a row, unemployment has stayed above 8%; a post-World War II record.  And, that's a horrible fact that the Democrats are trying to hide with that 750,000 a month job-loss deception.

Monday, July 9, 2012

A Story of Higher Taxes & Tax Cuts and of Spending and Spending Cuts

When we look at the last 3 decades of economic activity, under five different presidents, we find an interesting story.  A story of how higher taxes, tax cuts, increased spending,  and spending cuts affected the economy; specifically, in terms of how the Gross Domestic Product (or, our total economic output) was impacted.  And, the reason that I chose to look at the Gross Domestic Product (GDP) is because a healthy and growing GDP means less unemployment and higher federal tax revenues.  Or, in other words: If our businesses are growing and their economic output is increasing, they will pay higher taxes and hire more employees; who, in turn, will also pay taxes. So,  to tell that story, I've prepared this chart; making note of the President who was in office at the time and what tax changes and spending took place at the time:


Reagan/George H.W. Bush. When George H.W. Bush took over the presidency from Ronald Reagan in 1989, he inherited a roaring economy that was a pure product of Reaganomics.  In 1988 and 1989, the economy grew at 7.69 and 7.48 percent; respectively.  But, Bush also inherited deficits from Reagan.  That's because Reagan used over-the-top military spending to break the back of the Soviet Union and stop the Cold War in its tracks.  So, the task became to reduce the deficit.  Working with the Democrats, Bush agreed to reduce spending and raise taxes to reduce the deficits; with the tax increases starting first.  So, the famous "Read my lips. No new taxes" taxes when into effect.  But, as we know, today, the Democrats snookered Bush and they never implemented a single, promised spending reduction to also help reduce the deficits. The result of those tax increases was simple: The growth in the economy slowed significantly; with GDP growth slowing to as low as 3.3%  in 1991.  Ultimately, Bill Clinton was able to use his famous "It's the economy, stupid" to defeat Bush.

Bill Clinton. Bill Clinton increased taxes in 1993.  Primarily aimed at the rich, it raised the top income rate from 35% to 39%.  It increased the corporate tax rate to 35%; and, removed the tax cap on Medicare taxes so that the rich paid more.  Now, to this day, Democrats point to the fact that the economy got stronger after taxes were raised on the rich.  And, if you look at 1994, the economy was actually stronger than it had been the year before; when taxes were lower.  But, the real reason that the GDP jumped in 1994 wasn't taxes.  It was the 1993 passage of the North America Free Trade Agreement (NAFTA). Because of that treaty, American manufacturers did a one-time ramp up in inventories (product) in anticipation of increased trade with Canada and Mexico.   It's the same thing we see, every year, when manufacturers hike production to cover Christmas and holiday buying season.  But, to get to the true answer on whether or not tax hikes on the rich helped the economy, you need only look to 1995 where growth was at only 4.65%.

In 1997, Clinton bought into Newt Gingrich's "Contract with America" and signed into law the Balanced Budget Act.  That law dramatically cut spending in many areas of the government.  It created a budget surplus which many Democrats only attribute to Bill Clinton.  More importantly, the economy grew at an average of over 6% during Clinton's last 4 years in office.  At least until the dot com bubble burst in late 2000.

George W. Bush. In 2001, the economy took a one-two punch.  First, the economy was already slowing when George W. Bush took office; with the slowdown due to the collapse of the dot com bubble the year before. Growth for the First Quarter of 2001 slipped to just 1.3%.  So, in June of that year, Bush signed into law the first round of tax cuts to stimulate the economy; with most of the cuts phased in over a period of 9 years.  Initially, it looked like the cuts were working, and, then, the knockout punch came with 9/11.  The result was that growth slowed to just 1% in the 3rd Quarter.  Some conservative economists think the impact of 9/11 would have been much harder had the cuts not been in place. That may be true because, despite the horrendous impact of 9/11, the economy did remain above water.

In 2003, it was obvious that the economy was not recovering fast enough.  So, the second round of Bush tax cuts were put into effect.   Actually, the 2nd Bush cuts were the same as the first; except that, instead of a 9-year phase in, the cuts were made immediate.  As you can see from the chart, the economy started growing again until late 2006 when the Great Recession hit.

Barack Obama. As is well known and as we are reminded of with nearly every Presidential campaign speech, Barack Obama inherited the Great Recession which started in December of 2006 and that ended 5 months after Obama took office.  Not knowing that the recession would actually end just 4 months later, Obama and the Democrats sign into law a $787 billion stimulus bill in February of 2009.  Monies under that law were to be sent out to the states for shovel-ready projects that would help put people back to work.  But, there was a snag and these so-called shovel-ready projects weren't so shovel ready.  In fact, money for the first projects didn't go out the door until August; almost two month after the recession had ended.  In fact, only about 26%, or so, of the stimulus was applied in 2009.  Yet, from 2009 to 2010, the economy actually turned itself around.  And, it did so despite the stimulus.  If anything, the application of more stimulus in 2010 and 2011 only saw a slowing of the economy.

Summary.  From the above we know that Reaganomics, with a combination of broad tax cuts and selective tax increases, produced the hottest economies in the last 3 decades.  Tax increases had negative results under Bush Sr. and Clinton; even when the Clinton taxes were only aimed at the rich.  Spending cuts by Clinton in 1997 made him a surplus spending hero.  The "W" Bush tax cuts, too, netted positive results.  And, Obama's massive spending has only produced a lackluster recovery. 

Conclusion.  It is spending cuts and tax cuts that have historically given our economy the biggest boost.  The last thing we should do is allow Obama to have another stimulus in the form of a jobs plan and raise taxes on the rich.  Both these actions have produced nothing but slow economies; and, if you researched it, you would also find higher unemployment.  This is why, everyone in the country should push for the Simpson-Boles Deficit reduction plan or the tax and spending plan from Paul Ryan.  Either would make this country better off than what Obama plans to do.

Romney Needs To Admit That RomneyCare Was A Failure


Before the Massachusetts health care law became politically labelled as RomneyCare, it was called MassCare. MassCare was forced to come into being because health care costs in Massachusetts were some of the highest in the country and were rising much faster than salaries and wages.  Like the rest of the United States, hospital emergency rooms were being clogged with patients without insurance.

When passed into law in 2006, MassCare had the lofty expectations that health care insurance rates and costs would be reduced; that the quality of care would be improved; and, that health care access would be expanded to 95% of state's citizens.  But, as of today, Massachusetts health care problems have only worsened.

First of all, MassCare increased the amount of patients and patient visits and care.  That would be good thing if the number of doctors were also increased to handle the new volume of patient activity.  But, it didn't.  So the doctors got swamped; leaving patients with the only alternative but to go to emergency rooms for their health care.  Today, choked emergency rooms are even more common place than before MassCare.

Then, there is  the issue of controlling insurance costs.  When MassCare became law, it greatly expanded the number of Medicaid insured.  This forced doctors and hospitals to accept a lower fee structure when caring for this whole new raft of Medicaid patents.  The bottom line was that doctors and hospitals started operating in the red and losing money with every Medicaid patient they cared for.  So, to offset the loss of income, health care providers were forced to raise the prices for non-Medicaid insured patients.  That cost was then passed onto the insurance companies who, in turn, were forced to raise their prices.  In the end, MassCare forced insurance rates to rise faster than the rates in other states.  Now, the current Governor, Deval Patrick has imposed price controls on insurance companies.  But, this in no way solves the problem of costs going up.  All it does is guarantee that marginally profitable insurance companies will go out of business.

Lastly, when MassCare was proposed, it was only supposed to cost the state $88 million.  Today, the expense is in excess of $4 billion and rising.

MassCare was a poor attempt to rein in costs and improve care and, Romney needs to come clean on that.  Otherwise, he will never be convincing in criticizing ObamaCare and talking about its repeal.


Sunday, July 8, 2012

The Economy Actually Lost Jobs (again) Last Month

Depending on which economist you listen to, the economy needs to add somewhere between 125,000 to 166,000 jobs every month; just to account for population growth.  A failure to do so actually means that the economy lost jobs.  According to last Friday's employment report, only 80,000 jobs were added.  What that really says is that the we actually lost between 45,000 and 86,000 in June.  Would somebody please tell Obama that this is not "a step in the right direction" as he had commented on Friday with regard to the jobs report:

Saturday, July 7, 2012

A Jobs Number That Obama Can't Spin

Every month, coincidental with the release of the Employment Report, the Bureau of Labor Statistics provides a single statistic that most economists believe to be the best indicator of the current and past employment situations.  That statistic is the Employment-to-Population ratio (EPR).  Simply speaking, it is the percentage of how many working age people -- ages 16 to 64 -- have jobs.  Unlike the workforce participation rate, it doesn't muddy up the water with people who are too young or too old  to be in the workforce; while still accounting for population growth.  And, for sure, its a better number than the highly manipulated unemployment rate and the number jobs that are supposedly added each month.

Prior to the recession, the EPR was above 63.   When Obama took office in January of 2009, the ratio was 60.6.  By the end of 2009, it had fallen to 58.2; with the ratio only bouncing back to 58.7 in both April and May of 2010.  But, since then, the ratio has never again reached 58.7.  When you look at the chart of the EPR over the last 10 years, you see a pronounced drop; beginning in 2007.  After finally bottoming out in late 2009, the "trend" has been almost straight-line sideways ever since.

No matter how many times Obama claims to have created 4.3 million jobs, the EPR tells a much different story.  Certainly, a much truer story.  And, that story is that Obama has done nothing in the last 3-1/2 years to improve the employment situation for the work-capable segment of our population. 

Finally, like every summer since 2007, I would expect the EPR to start falling again.  Certainly, Friday's lousy employment report only reinforced that belief.

Note: The month-by-month data and the chart can be found at: http://data.bls.gov/timeseries/LNS12300000

Friday, July 6, 2012

The Chicken Littles Of Global Warming Are Out In Force Over The Current Heat Wave

Well, it was to be expected.  If there's record heat, it must be due to Global Warming. So, all this week and last, the climate change alarmists have been out in force blaming Global Warming for the fires and hot temperatures across the nation.  But, all of these people are a bunch of Chicken Littles;  making a groundless claim that they can't prove.

The fact is that heat waves are to be expected; occurring throughout history and with or without the notion of Global Warming.  The worst heat wave in this country happened in 1936 during the Dust Bowl years; a half century before Al Gore and his marauders started hyping Climate Change.  During that summer, temperatures all across the United States were  in excess of 100 degrees; and, many of the records that were set then, still stand.   But, the current heat wave has not been as expansive; leaving the Northwest and New England somewhat unscathed.  And, by the way, the following Winter of 1936-37 was one of the coldest in history; proving, once again, that Mother Nature always tries to level things out.

The Individual Mandate Tax: Obama's "Mitt Did It Too" Argument

Often, when little kids are caught doing something wrong, they will use the "but, Bobby did it too" excuse; as if Bobby's badness should somehow excuse their own wrongdoing.  Children quickly learn that this tactic won't let them escape punishment.  So, its interesting to see an adult, especially one that's the President of the United States, pull that same childish stunt.  It has to do with the Individual Mandate being a tax, and especially, a tax on the middle class.

Obama and his people seem to think that he should be excused for having created a middle class tax as part of ObamaCare because Mitt did the same thing in Massachusetts with that health care law. But, Mitt Romney didn't stand up before the American people for the last 4 years and promise no new taxes on the middle class.   Obama did...and, the Supreme Court has confirmed that the Individual Mandate is, in fact, a tax on the middle class.  So, if Obama wants to continue to use the  "Mitt did it too" excuse, he should go "wash his mouth out with soap"; like any other little bad kindergartner.

Thursday, July 5, 2012

Justice Roberts Potential Gift To The GOP: Budget Reconciliation

From the day that the Patient Protection and Affordable Care Act (aka ObamaCare) was passed into law, the Democrats always felt secure in the fact that it could never be overturned by the Republicans (GOP).  Because the formula to do so would be nearly impossible.  And, that formula would have to be "all" of the following:  (1) a majority of seats in the House of Representatives; (2) a sitting Republican president; and, (3) a filibuster-proof, 60-seat voting majority in the Senate.  Their only fear was that ObamaCare could be found unconstitutional by a conservative-dominated Supreme Court.

But, when the Chief Justice of the Supreme Court, John Roberts, sided with the court liberals and ruled that ObamaCare was primarily a taxing law,  the most difficult aspect of the above formula,  a 60-vote filibuster-proof majority in the Senate, was just thrown out the window.  No longer was ObamaCare a law that was constitutionally founded in the Commerce clause and subject to filibuster rules of the Senate with a 60-vote majority needed to override any filibuster.   Instead, the law has now become a taxing and budgeting issue; subject to the Senate rules for Budget Reconciliation where filibustering doesn't apply.  So, all that's needed to overturn ObamaCare in the Senate is a simple majority of Republicans.

But, let's not forget that Roberts' gift is only a gift if the Republicans maintain control of the House and gain control of the Senate and get Mitt Romney elected president.  Otherwise, ObamaCare will remain the law of the land. Let's also never forget what damage the Roberts' decision did.  For evermore, the Congress of the United States can now tax any of us for not doing or buying something.

Medicaid And Medicaid Expansion: The Dirty "Big" Secrets The Democrats Don't Want You To Know


Last week, when ObamaCare was  "generally" upheld by the Supreme Court, a key provision of that law, the forced expansion of Medicaid, was actually struck down.  In a 7-to-2, majority decision, the Supreme Court ruled that the federal government has no right to tell the states that they must expand Medicaid and and eat the cost or lose all federal funding for their existing Medicare programs.  Since then, at least 8 Governors  -- all Republicans --  have declared that they won't participate in the expansion; citing budget deficits being behind their decisions.

Surprisingly, the Democrats and the main stream media have been somewhat cold in saying or reporting anything about this.  The only time the press actually mentions it, at all, is to paint some Republican Governor in a negative light by noting that thousands of low-income citizens will be without access to health care.  But, that's an intentionally political deception.  For starters, only about 42% of low-income wage earners are without any health insurance.  The majority either get employer-provided insurance; or buy it directly, themselves; or, get their care through the Veterans Administration or through the Medicare disability program.  Secondly, since 1986, anyone in America, not insured, could go to an emergency room and expect to get care without question or any real commitment to pay.  Which is what those uninsured low-income people have been doing for years.


Just so you know. Medicaid is a program that was designed to give health care access to the very poorest of our country.  Basically, those people and families whose incomes fall below the currently defined threshold for poverty are all eligible for this program.  The cost of the program is shared by both the federal government and by the states; with the federal government currently covering 57% of the expense. In 2010,  Medicaid had 53 million participants and the overall cost was $409 billion.

Now to the dirty "big" secrets.  

Secret 1: Medicaid is an extremely expensive program.

As I indicated, above, the 2010 overall cost of Medicaid was $409 billion.  When you divide that number by the number of program participants, you get a per person cost of $7717.  But, you see, that per capita cost is $2677 higher than what the Kaiser Family Foundation said it would cost to buy private, individual health insurance in 2010; proving that, once again, the government never does anything cheaper than the private sector.  That's something to keep in mind when liberals tout the savings and benefits of ObamaCare.  And, that high cost is the reason that many states have adopted a program called HIPP (Health Insurance Premium Payment) whereby Medicaid participants are given a check and allowed to buy their own insurance; saving  millions in the process. The concept of HIPP is one of the programs by which Republicans are eying to reduce the massive cost of both Medicaid and Medicare.

Secret 2: 41% of the population already receives government sponsored health care.

Of the government sponsored health care programs, Medicaid is the largest with more than 60 million participants.  But if you add an estimated 50 million Medicare participants, and 8 million children in CHIP (Child Health Insurance Program), along with 8.7 million people who are getting federal disability insurance, and another million Vets receiving health care from the Veterans Administration, you get a total of nearly 128 million Americans who are getting their health care from the U.S. government. That's 41 percent of the population. 

Secret 3: The Expansion of Medicaid under ObamaCare was a deceptive move to greatly expand government sponsored health care in America.


For decades, Democrats have dreamed of having a government-run, single-payer health care system in this country; feeling that the current private insurance system disproportionately provides health care to the more affluent of our society.  So, when they started crafting ObamaCare, they seized on the opportunity of progressing that "dream" by expanding Medicaid to the supposed 25 million-low income people who, in theory, make up the majority of the uninsured. The rest of the uninsured would be addressed through the Individual Mandate or through the new health care insurance exchanges.  But the dirty secret here is that there are really about 90 million people in America who are classified as low-income wage earners; of which, about 75 million who could, in theory, be eligible for Medicaid under  ObamaCare. The Democrats are only counting the 25 million of that 75 million because they would have you believe that the remaining 50 million, who already get their health insurance in some other way, would continue to do so.  This is another deception.  Why would anyone continue to pay for my health insurance if  they knew they could get Medicaid insurance for free?  Simply speaking, the Democrats put the Medicaid expansion into ObamaCare so the 75 million more Americans would source their health care from the government; bringing the total being served by the government to 52%.  And, that 52% is a majority base that Democrats could use to win elections.

Secret 4: The cost of the new Medicaid expansion was intentionally hidden by forcing the states to pick up the cost.

By any measure, the expansion of Medicaid to 25 million low-income families and individuals would have a cost in excess of $200 billion the first year; and, then, grow at an estimated rate of 7.3% per year, compounded, thereafter.  That was a hefty chunk of change that would have driven federal deficits up by at least $2.5 trillion in 10 years.   So to avoid this cost and deceptively show that ObamaCare would be deficit neutral, the Democrats offloaded the cost to the states.  And, to make sure the states paid for the program, they inserted language into the ObamaCare law that said that they would lose all federal funding for Medicaid if they didn't fund the expansion.   Of course, as mentioned in the first paragraph, the Supreme Court found this to be thuggery and coercion and struck it down.  But, the fact remains:  If your state does pick up the cost of the expansion, it will show up in you pocketbook in the form of some new tax; for rich and poor, alike.

Secret 5: Medicaid patients will suffer from substandard health care in the future.

Medicaid, like its sister program, Medicare, attempts to control costs by squeezing doctors, hospitals, and other health care providers on the payments that they receive from the government.  As a result, an increasing number of health care providers are either dropping or refusing to take Medicaid (and Medicare) patients.  Like cattle, Medicaid patients are being herded into high volume, low quality, clinics for their medical care; waiting long hours or even days to see a physician or specialist.  So, increasingly, the more affluent of our society are being treated by the good doctors and getting good care.  Something that the Democrats wanted to fix by taking over the health care system. Just like Canada and England, nationalized health care necessarily induces long delays and lower quality into the system. Like the old saying says: "Medical care delayed can be the same as medical care denied.  Especially, when the patient died!"

Tuesday, July 3, 2012

The Democrats Have Always Loved to Bomb From Afar

A lot is being made of the fact that Obama is proving that a Democrat can be tough in war.  To prove this, liberals point to Obama's ordering of stepped up drone attacks in both Pakistan and Yemen.  But, in reality, Democrat Presidents have always chosen bombing over troops on the ground.  That's because bombing, despite collateral civilian deaths and destruction, doesn't have the stain of dying American soldiers.

In 1964, President Johnson instituted Operation Rolling Thunder which sent high-altitude B-52 bombers and other strike aircraft out to "carpet bomb" the border between South and North Vietnam; below the 19th parallel.  In 1999, Wesley Clark, as directed by President Bill Clinton, literally bombed the hell out of Kosovo in what was code named: Operation Allied Force.  Of course, with no troops on the ground, this action produced no U.S. fatalities; even though more than 500 Yugoslavian civilians lost their lives in the 78 days of high altitude bombing.

You see, Obama is no different than his Democrat predecessor in issuing drone strikes in Pakistan and Yemen.  This doesn't make Obama tough.  The tough decision is to use ground forces to avoid civilian deaths.


Monday, July 2, 2012

Obama Surrogates Downplay The Individual Mandate Tax And Even Refuse To Call It A Tax.

Both as a candidate and as president,  Barack Obama has promised no new taxes or any tax increases on anyone making less than $250,000:



Yet, when Obama's Solicitor General went before the Supreme Court to argue the constitutionality of ObamaCare, he argued that the Individual Mandate and its associated penalty was a tax; and, that Congress had the constitutional authority to levy such a tax. If he had argued that the penalty was a penalty,  that would have squarely placed the Individual Mandate under the purview of the Commerce clause; making it easier to be found unconstitutional. Ultimately, the John Robert's Supreme Court agreed with Obama's "tax" argument.

But, now, in a "be careful what you wished for" sidestep of reality, the Obama Administration is doing everything it can to avoid calling the Individual Mandate Tax a "tax".  To do so, would reveal that Obama had gone back on his  pledge not to tax anyone making less than $250,000.  Just listen to Obama's Chief of Staff squirm over the tax issue:



Then, there are these nonsensical  remarks uttered by Nancy Pelosi:



But, more than that, the Obama surrogates are also trying to downplay that "tax" by trying to say it will "only" affects 1% of the population who irresponsibly don't buy health insurance.   However, that 1% of our population is over three million people. But, that, too, is a deception because the Congressional Budget Office expects that the "tax" will affect more than 4 million people.   I personality think that number could be upwards of 20 million people or even more.   That's because, under ObamaCare, no insurance company can deny you coverage for any preexisting condition.  So, why pay a minimum of $3000 a year for health insurance when you can simply pay the Individual Mandate Tax of $700 a year?  That's an annual savings of at least $2300 that can easily pay for a lot of  "ordinary" health care costs over a per of a year's time.  Then, when you really do get sick -- like being diagnosed with cancer -- you can simply sign up for insurance.  And, the insurance company can not deny you that coverage because you now have a disease.

It's this combination of a small Individual Mandate tax and the exclusion of any preexisting conditions that will ultimately play a part in destroying the private health insurance system in this country; forcing all Americans to become part of a government-run, single-payer health care system.  And, that's been the goal of the Democrats all along.

Lastly, no Republican should let Obama or any other Democrat snooker the American people by avoiding calling the Individual Mandate Tax a tax.  It was argued as such; and, it was found constitutional as such.

Are Corporations People? No, according to Obama and the Democrats.

Last year, at a campaign rally, Mitt Romney, when being harassed by a certain spectator in the crowd, made the statement that "corporations are people".  Immediately, the anti-business and anti-corporation Democratic National Committee jumped on those words and put this campaign ad together:



Since then, Barack Obama  and other Democrats like Elizabeth Warren -- the U.S. Senate candidate in Massachusetts --  have repeated Romney's words to try and prove that he is both out-of-touch and in the pockets of the wealthy and big business.  But, for these people to argue that corporations aren't people is simply a specious argument.  Romney is right because corporations, as an entity, are a collective of people; both in terms of jobs and ownership.  Right off the bat, under the laws of this country, a corporation is  legally viewed as a person.  Because a corporation is a person, it must obey laws and it can be taxed. Something that the legal scholar, Barack Obama, should know quite well.

But, to the point that Romney was trying to make, let me use a hypothetical small business such as a lawn care service as an example.  Let's say that service is made up of three people: an owner and two employees.  I doubt that any Democrat, even Barack Obama, would say that business isn't either made up of people or, simply, isn't people.  Well, here's the thing, that lawn care business, if the owner wanted to, could become a corporation tomorrow. And, if it did become a corporation, it would look no different than it did before.  It would have the same owner and two employees.

Incorporating or the act of becoming a corporation is simply a legal mechanism to allow for structured, multiple ownership.   The owners are people who own shares or stock in that business.  Those owners have voting rights on a one vote per one share basis.  The shareholders will collectively elect a Board of Directors to oversee the general operation of the company.   The "Board" will hire a Chief Executive to run the business who, in turn, will hire other employees; as needed.  On behalf of the shareholders, the Board of Directors and the Chief Executive will decide what has to be done to grow the company and make it profitable for the shareholders.

The rationale behind this "corporations aren't people" lie is all about politics.  Barack Obama and other Democrats don't want us to think of corporations as truly being people, because it would then make it difficult to demonize them without looking like they're demonizing hard working people who work for and own corporations.