Law of the Bad Premise

Sarah Palin and the GOP

 

One way or the other, Sarah Palin will have the biggest impact on the GOP’s chances to win the presidency  in 2012. Her recent editorial in the Wall Street Journal supporting Rep. Paul Ryan's economic deficit reduction and economic growth plan is simply her latest in a series of comments on the important issues for America. Her astuteness in these matters is apparent. No, I don't care if she actually writes these, although there is no reason to believe she does not. Whether she does or not, it is apparent she understands their importance and meaning.    

The two areas where the Federal Government can do the most damage domestically are: 1) the fiscal issues of tax and spending policy, i.e., too much of both; and, 2) regulatory nihilism----in particular relating to the ad hoc restriction of property rights unilaterally by the executive branch. This happens when the Government implements and interprets vaguely written laws with "unintended" consequences. Examples include the recent Chrysler and GM bailouts, unfunded mandates of all kinds; defining CO2 as a pollutant; the already unchecked power of the EPA overall; and the upcoming Big Kahuna, "Obamacare".

Ryan's proposal, A Roadmap for America's Future, addresses the first issue most directly and parts of the second issue indirectly (for example, his proposals to change Obamacare). I think his plan is a good plan. It is good primarily because it exists at all. If it were up to me the plan would be more simple. About 2/3rds of the forward federal budget are entitlements. Basically, the way our entitlement system works is as follows. It taxes 1 dollar from one group of people and promises 2 dollars to another group of people. All of us are in both groups, although at different times in our lives and for different forms of entitlements.

This is not hyperbole, just a simple statement of what the Government does in fact. The ratio of 1 to 2 may be different, but you get the point. What does this mean? It means as a nation we are less wealthy than our official balance sheet says we are. Think of your own assets and liabilities. If you are like me there is one liability you ignore, the debt of the federal (and state) government, which can only be paid with your taxes, (which is what politics is about, i.e., "who gets and who pays?"). On average, a family of four owes about $140,000 using the most favorable accounting in federal debt. It is really a multiple of that when one factors in the growth path of entitlements, as they are growing far faster than our economy can support.  

Any individual today can go on the Social Security website and it will actually show you your personal social security account as if it were a brokerage statement. But unlike a brokerage statement, there are no assets---just a promise to pay. What they will not show you are your personal liabilities owed to the government, because we pretend individuals don't owe it. If it were there honestly, you would find you owe more money than you will receive, if we had actual transparency. Our entitlement system is not a mere transfer payment system, which by comparison would be almost harmless; it is a true Ponzi scheme, and therefore not sustainable. All economists know this of course. I honestly believe most politicians really do not understand this.

Ryan's proposal at least transparently addresses the problem of entitlements for all to see. Yet it sits out there in no man’s land within the GOP, with no visible alternative in sight. Entitlements are called the third rail in politics for a reason. I believe the reason the GOP fears this issue, as all past politicians have, is there is genuine concern that the so called tea party movement, which put the GOP back in power, is not really the vanguard of a fiscal restoration movement. Rather, they fear it is a more traditional “don't gourd my Ox" movement. Maybe it is; if so then we really are at the beginning of the end for the American Empire.

Sarah Palin is the first presidential "hopeful" to come out aggressively in support of Ryan, while recognizing it is not a "perfect plan". Implicitly and explicitly, therefore, she is the first candidate to support an actual existing plan to reduce entitlements in exchange for a more free market based savings and healthcare system. This is different than supporting a non-existent or incoherent plan spouting platitudes. This is significant in my opinion. The GOP candidate that can carry this message forward without alienating the people, who must elect them, will have achieved a historically significant accomplishment. It is very hard to be the bearer of bad news such as; "we are not taking anything away from you because you already don't have it. Rather, we are creating a system where your savings and health care consumption are not empty promises". I do not pretend this is politically easy. But, as a nation, we need to do this.

Of course, as has been obvious for 2 years, the GOP has no respect for Palin. It even borders on hate or disdain. They disdain her because they believe she won a lotto ticket when McCain put her in the spotlight, (which she did). They hate her because she is popular and uncontrollable, also true. They disdain her because they believe she is vain and self absorbed ---I disagree---but certainly no more so than other candidates. They hate her because they think she is stupid. This implies those who say so are smart. To quote Steely Dan from “Reelin’ in the Years”—“you’ve been telling me you were a genius since you were seventeen, and all this time I’ve known you, I still don’t know what you mean”. This obsession with “smart” and politics is the ultimate misunderstood red herring. Finally, and most of all, they hate her because they think she will lose—which only an election can determine.

Consequently, and most recently, we see the spectacle of my home state (and town) governor, Chris Christie, yukkin’ it up with Jimmy Fallon on the dopiness which is Palin. I like Christie a lot, but now less so. We see the shocking gracelessness of Big Barb Bush wishing Palin would just go back to Alaska. We see Karl Rove invoking the empty concept of missing gravitas as Palin does an Alaska Culture and Travelogue show on TLC. Gravitas in politics? Is he kidding? Which politician had an 11^th commandment? I forget.

As Palin said after the disgraceful comments of Christie and Ms. Bush, “let’s have the competitive process determine who will be both candidate and president”. I believe the person who will be chosen for both is the one who can, among other issues, best articulate our fiscal problems and actual solutions, in a way which persuades people truthfully. Such a person also has the potential to be an historic figure. I don't know if this person is Palin or not, nor does she. But her support of Ryan’s plan, despite its weaknesses, is a step in the right direction.                    

So far, Jumpin' Joe Biden said it best, even if partially in jest; "It is a mistake to underestimate Sarah Palin".

Please go to David Horowitz' site to also view this and other essays. 

Why the GOP Fears Sarah Palin | NewsReal Blog

 

Message to Buffett on Taxes: Shut Up and Play Bridge

An updated version of the first blog I ever wrote (July 3, 2006)

 

The photo above depicts Warren Buffett and Bill Gates at a bridge event in Omaha, Nebraska in 2006.

Warren Buffet was back on television last weekend telling ABC News how the rich don't pay their fair share of taxes. One would suppose that just the very fact of that statement, coming from a man worth $50 billion or so, who pays and has paid virtually no taxes, is 78 years old, and whose estate also will never pay taxes would be self evidently ridiculous. For some reason it is not. He apparently agrees with Obama's definition of the rich as a married couple making $250,000 (in New Jersey for example) whose marginal income tax rate is over 50%. Let me explain the nature of Buffet's tax advantages.

He is a major shareholder of Berkshire Hathaway. Berkshire Hathaway is simply a publicly traded company called a holding company that owns a portfolio of parts or all of other companies. For example, it might own 5% of Coca Cola and 100% of a furniture company. Berkshire Hathaway and Buffet's style of investing is as a long term investor. Relative to other portfolio managers and the overall market he is far less diversified. He is really a hedge fund manager who uses a publicly traded company as the vehicle. Despite his views about taxation, his 55 year track record has outperformed the overall market by a large margin. There is some probability this is just luck, but it is a very low probability.  Given the length of his track record and the magnitude of his risk-adjusted out performance, it is likely his results are not merely luck. I for one have no problem with his earned wealth.

But one should have a problem with his tax views. Most of his income comes from unrealized capital gains, so he pays no taxes. He pays himself a small salary. Most people who invest, first pay taxes on income and then invest. He does not. He initially invested successfully with other people's money and has effectively been able to grow his wealth virtually tax free through his percentage ownership of the publicly traded Berkshire Hathaway. Why does he resent others doing so?  His philosophy on taxation can be divined from a quote in a May 1977 article in Fortune Magazine.

"A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention".

So does Buffett believe he was really lucky after all? What do you think? Is this not a similar statement as "from each according to his abilities and to each according to his needs"? If the government is such an efficient allocator of wealth, why does he not contribute, say, 40% a year of his annual increase in wealth to the Feds? His deterministic philosophy has not prevented him from maximizing total control of his own wealth. Worse, his implied deterministic attack on existential freedom (is it really just the right "vocal chords" which makes one a singing star?) seems to be something that excludes himself. Who should decide from whom and to whom one is to "divert" these portions of national income? Well, people like Warren Buffet, of course, whose legacy foundation (with Gates) will never surrender its economic freedom. Surrendering freedom is for dopey "hardworking citizens lacking jackpot-producing talents" but make more than $250K a year. He views himself a philosopher king. Like so many people with great talent in one field he believes this talent translates to other fields. But Buffett is a philosophical moron and ghoul. One of his greatest "charitable causes" is global birth control, a very ghoulish pursuit indeed.

The heralded joining of modern American Capitalist icons, Gates and Buffett, in the Gates Foundation (Business Week) is disturbing on several fronts. Everyone should have the right to do with their money as they wish. But why is it unquestionably assumed that "charitable foundations" are somehow better for society than merely leaving money to one's heirs tax free? Have not free markets made great progress toward alleviating poverty in the 20th/21st century? Does monolithic directed activity from Foundations "solve" social problems (even if done in the private sector) better than free markets? If given a choice, I prefer Gates and Buffet to the US Government---although I am not sure what I base that on other than it seems hard to be worse than the US Government in allocating scarce resources.

Even good for nothing heirs have to do something with their money. All money not spent is invested--and somehow that invisible hand has gotten scarce resources to the right spot more times than other methods of resource allocation. Even profligate consumers make others profitable who in turn invest. One of my favorite quotes, of which their are dozens of variations, relates to a Stalinist Minister who visited London in the 30s and noticed that the stores were all stocked with bread. "Who is in charge of getting bread to the stores?" he wondered to his host. Of course the answer is no one. The question must be asked, "why are Gates-Buffett style Foundations better at resource allocation than free markets and thus deserving to be untaxed?"

Again, one should have no problem with people doing with their money as they wish. Even "charitable foundations" who fund various and dubious projects (Ford Foundation) should be allowed to do as they wish. However, what is really objectionable about the moralistic crowning of Buffett-Gates is what their own tax views are. Both Buffett and Gates (through his father) have come out square against eliminating the estate tax. Implicit in their opinion is that they know best about what to do with money (i.e., it should be given to foundations). If it is not given to foundations then it should be confiscated (taken, taxed, stolen...whatever) by the Government. However, in no instance should it go untaxed if merely left to heirs. Why, because we need someone in charge of getting bread to the stores? Self important and self righteous, these otherwise admirable men have determined they deserve demi-god status (of course they are not alone, but they are the most well known) in determining what mere mortals should be allowed to do with their earned (and previously taxed) capital.

For Buffett-Gates it is my way or the highway. As far as I'm concerned they can take their foundations (and their nauseating chest beating Bridge Tournaments) and just------go away.

-- 

 

Napolitano and Holder: Making Us Safe

 

(originally published November 21 on David Horowitz Newsreal blog---see below for link)

 

This week’s juxtaposition of Janet Napolitano’s theater of the absurd roll-out of new airport screening methods with the conviction of “man caused disaster doer,” Ahmed Ghailani, for conspiring to destroy property, almost makes one forget how bad our economic circumstances are.

When Napolitano was asked by reporters Monday “will you insist that {women wearing hijabs} go through full body pat downs?” she responded not with a “yes,” but said “with regard to that specific issue there will be more to come…..we are doing this to keep powders, liquids, and gels off the planes.” That really is all you need to know about Obama’s TSA. But for extra credit, I include the following.

Every time a shoe, underwear, a box cutter or whatever is used once in an attempted terrorist attack by a foreign Muslim, a specific prohibition on all Americans is enacted. For air travelers it is akin to the proverbial frog being slowly boiled to death. Ann Coulter is exactly correct—-the final step will be explicit cavity searches. There are approximately 50,000 commercial air flights a day worldwide. That is 18 million flights a year or about 1.5 billion travelers a year. It is interesting that whatever policy was in place at the time of the several post 9/11 attacks (shoe bomber guy, Detroit underwear guy—-probably others) they were unable to detect the “man caused disaster doer” in advance of boarding the plane. Yet each time he was foiled. The policies put in place early on in 2002, combined with passenger and crew awareness, have been very effective, despite these few exceptions among close to 200 million flights globally. Napolitano, who clearly is utterly clueless and not making any of these decisions, is a sight to behold. Despite these newer TSA prison search policies, there will still be some future Richard Reid. How much more effective can we reasonably be?

The most successful preventions have come well before people have even entered airports. This is because resources are actually focused on high probability targets instead of our one size fits all body searches. The probability of a terrorist attack by plane was and still remains remote. Passengers also will never again be surprised and unresponsive. I would like to see the statistics of actual would be terrorists caught just prior to boarding a plane. I do not recall ever hearing of any, but there must have been some, right? The TSA does perform checks on its screeners. USA Today reported in 2007 that 75% of TSA plants made it through the screeners. But we still have few incidents. We all are willing to endure slowdowns etc., to improve safety. But the spectacle now being imposed has become degrading and humiliating to us as individuals and as a nation. It is humiliating because what we are doing is transparently stupid and extreme.

If you disagree, why aren’t we demanding all cars be searched at rush hour on all bridges and tunnels in America? Or, why isn’t every package carried by an individual walking on a city bridge not checked for explosives or machine guns? Or why aren’t every person on crutches checked to see if their crutches can be converted to sniper rifles (Day of the Jackal).

Plus, apparently airports can choose to “opt out”, as Orlando just announced it will hire a private company. (Look for lawsuits from profiled passengers). How does that fit in? Homeland Security was always a bad idea. “Money is no object” bureaucracies are always looking to branch out to justify their roles. As they do, our common sense gets slowly boiled away.

Our second terror related event of the week was the trial of Ahmed Ghailani. Indisputable proof that civilian trials, such as the recently completed Ahmed Ghailani trial, are a “dead policy walking” is that Joe Biden was sent out to defend it. Whenever complex legal matters arise who but Syracuse Law School “plagiarizer” and VP Joe Biden (it really is amazing when you think about it) would one look to for nuanced analysis?

For reasons only Eric Holder and his all but drained and emptied boss can know, they attempted to embark on a US civilian trial path for foreign nationals captured in foreign countries engaged in violent actions against America in foreign countries. This was advertised as demonstrating our moral superiority to those who behead people for flouting resistance to various forms of Sharia Law. As such, they will hate us less. I think that’s the gist of the argument. I would prefer they focus on making sure things like trade agreements are already in place with, say, South Korea, before attending a victory signing.

The Ghailani case was originally cast as a trial balloon–no pun intended. It was scheduled as a practice run for the now canceled civil trial of 9/11 leader, Khalid Sheikh Mohammed. That plan was dropped almost a year ago as New York said “thanks, but no thanks.” Guess where KSM resides? Before we get to Guantanamo, let’s review the Ghailani case. He is a Tanzanian Muslim “preacher” who was a top 10 wanted terrorist on the FBI list created soon after 9/11. He was/is an al Qaeda member with an expertise in explosives. He was captured in Pakistan in July of 2004 after the Bush administration declared he and several others were planning a terrorist attack against the US. Democrats at the time accused Bush of pulling a political stunt to improve his poll numbers. He was also one of the major suspects in the Nairobi US Embassy bombings in 1998, the reason he made the 2001 FBI most wanted terrorist list. The primary reason 285 out of 286 counts were dropped in his case was that the government’s key witness was disallowed.

The Obama administration‘s 2009 emphasis regarding civilian trials of “enemy combatants” was intertwined with its views about Guantanamo. Obama campaigned hard on closing it down but an emphasis on civilian trials and elimination of water boarding is what distinguished his views from Bush, who also claimed a desire to close the base (as did McCain). For those who oppose it, Guantanamo represents the US taking away internationally sanctioned rights of imprisoned and uncharged Muslim terror suspects by never having to declare when they might be released or have charges brought against them. The physical location itself obviously has no bearing on this issue.

In case you have not noticed, the Obama policy actually remains unchanged from Bush’s. He has wanted to change it but was unable to because of popular opinion. His only explicit chance at demonstrating a difference turned out to be this Ghailani case, which is now a public relations nightmare. Having all but one count dropped may not have been as scary close as it seems, but it is close enough for people’s original suspicions to be justified.

The US is a party to all Geneva Convention protocols. But the concept of what constitutes an unlawful combatant, a lawful combatant, a POW and whatever sub-categories exist, is Talmudic to the extreme. Yet these interpretations do determine the legality of various policies. I am confident that logical arguments in the abstract, given the unanticipated recent rise of cross national guerrilla warfare organizations such as al Qaeda, can make opposing legal arguments each sound plausible. I am equally confident that such laws as now written have significant internal contradictions and undefined operational definitions that make the interpretation itself the precedent setting and law defining event.

Like all law, therefore, this means the choice to try Ghailani in New York City was purely political in nature. The Obama administration chose to take this course of action (which he effectively has already reversed by the cancellation of the KSM trial) based on his political views. It was designed to curry favor with the internationalist left wing element of the Democrat party of which he and Holder are a part. Obama even seemed to have the naive belief that this would actually help in our relationship with these terrorist organizations and enemy nations.

Now we have Biden proclaiming the civil trial is better because the sentence is longer than it would have been had there been a military tribunal. We have no idea what would have happened under a military tribunal. But is that the case he is supposed to make? Its process they have always argued for, not outcomes. I could be wrong, but is there any chance at all Ghailani would have been released under any circumstances even if declared not guilty? The answer is no. It would be absolute political suicide. This was all but stated explicitly by Holder in Congress when making his case for a civilian trial of Mohammed.

This “we guarantee conviction” argument is a strong reason for not having civilian trials of known terrorists. These really are and would be show trials. These guys would never go free because it would guarantee electoral disaster. So why push the envelope on this issue? The people have zero sympathy for fake constitutional rights for terrorist enemies such as Ghailani.

Obama actually has heard this message loud and clear. If the KSM revolt did not do the trick, the dismissal of 285 counts in the Ghailani trial certainly did. But he is stuck, hoisted once again on his own petard.

Perhaps if he only communicated with us more…………….

Continue to David Horowitz NewsReal Blog for other essays 1 2 3

 

 

 

October Surprise! Left Ferrets Out Trotskyite Juan Williams---Schiller Next

Vivian Schiller, CEO of NPR, has one of the best jobs in the world. Illustration by Riccardo Vecchio

 

At first I thought this was a joke—"Juan Williams firing may be violation of Foreign Agents Act ". The lobbyist group, The Center for Security Policy, has suggested CAIR (The Council on American Islamic Relations) was responsible for Williams’ firing. To the extent they are major contributors to NPR or its parent, The Corporation for Public Broadcasting, this is plausible. While CAIR was highly vocal in criticizing Williams for putative anti-Muslim comments, this is what they do. They have an outrage a day.

But I don’t think that was why he was fired. I believe NPR president Vivian Schiller was clearly operating on implied or understood orders; but from who? I may be watching to much Fox programming (for example, its hit show, “Lie to Me”) but her comments were a series of non-sequiturs.  Her meta-reason for firing Williams was for “expressing opinions not analysis” on Fox News. If that were not absurd enough, she told reporter Rodney Ho this was not an isolated incident for Williams. In fact, there have been repeated cases of Williams being warned about “expressing opinions not analysis” and as such, this was not a case of “one strike and you are out”. (First interview with NPR CEO Vivian Schiller on Juan Williams

When pressed by Ho to name other incidents, Schiller came up with this quote; “he famously said “something” last year about Michelle Obama and Stokely Carmichael”. Does anyone under 50 actually remember Stokely Carmichael? He was most identified with black separatist politics in the 1960s. What was that “something he famously said”?

In what must be the most humorous and psychologically astute line ever uttered by the usually bland but pleasant Williams, he said (soon after the inauguration) “the First Lady has this Stokely Carmichael in a designer dress thing going”. Williams was referring to her faux militancy and oft-repeated assertions about America’s moral weakness. He also implied that Michelle would eventually hurt Obama’s popularity (her entourage vacation to Spain makes Williams seem prescient).

Apparently this was an outrage over in NPR land. And why not? They receive about 2-3% of their budget from its government supported parent, which on the margin is meaningful. They must have feared the wrath of Michelle back in 2009. NPR’s "ombudsman” in 2009 called Williams a “lightning rod” of controversy. This comes as a bizarre comment for Fox News fans—[Here's NPR's ombudsman's piece on him last year after the Michelle Obama comment.]

Ten years at NPR and the only “opinion not analysis” they could identify were Williams’ Muslim and Michelle Obama comments?  Schiller was clearly obeying orders, but not from CAIR or Soros (who did contribute $1.8 million this month to NPR). Williams has been on the target list for some time.

I believe it was Michelle Obama who ordered the hit. But Ms. Schiller’s clumsy firing was surely not appreciated at the White House as she implicitly linked Michelle with the firing of Juan Williams. Not cool. In fact, Schiller has just been written up by the NPR Ombudsman.— NPR’s Firing of Juan Williams Was Poorly Handled : NPR Ombudsman : NPR.

The countdown for Ms. Schiller begins.

 

Please see post at David Horowitz Newsreal website---October Surprise! The Left Ferrets out Trotskyite Fashion Critic ...

 

"Young Guns" and "Chastened Rebels": The Clowning of America

Lame, limp and self absorbed attention seeking is not what most of us are looking for this year in our politicians. That’s what the Democrat Party is for. But Republican House members, Congressmen Eric Cantor, Paul Ryan, and Kevin McCarthy have released a new book entitledYoung Guns, featuring themselves on the cover, apparently designed to magnetically attract us to the Conservative cause. Rich Lowry of National Review has added a second tag line in an essay yesterday, calling the trio “chastened rebels”. The Weekly Standard claimed credit last week for the “Young Gun” moniker as they were referred to as such in a 2007 issue. Have people lost their minds? Normal people cannot possibly find this appealing.  Is one supposed to imagine a trio of mythic, heroic Roland Deschain Gunslingers, (from the Stephen King Dark Tower series), striding into town to take on the High Princess of Evil, Nancy Pelosi?  Maybe they envision someday having this cover photo replacing Che Guevara as the college dorm poster of choice for future rebellious youth.

If this book promotion were not bad enough, the GOP has also released a short video trailer, which could easily be used unedited as an SNL bit, if the average American knew who these guys were. Radio talk show host John Batchelor summarized it best (Attack of the Zombie Republicans) when he states that the YouTube video sets the standard for “suicidal vanity”. He observes mockingly that they look like “West Hollywood valets {who} gaze longingly at each other…….as a script from Frank Capra outtakes {plays} in the background”. Viewers should also take note of the Washington Monument photo taken from its base. I thought that sort of “subliminal” imagery went out with drive-in movies. Our erstwhile gunslingers are hard and virulent and presumably here to save us from tyranny.

The problem, besides the obvious clownishness of the imagery, is they have the storyline backwards. They are following the people, not leading. How inspiring is it when they say, according to the school girlish Lowry, “we want to make sure we don’t screw this thing up again”? Can it get much worse than that? The only reason the GOP may get a second chance to rule the House is because the Democrats are even worse. No one in their right mind is following “young guns” or “chastened rebels”. Not only is the imagery absurd, but the facts are contradicting the premise.  Ryan and Cantor have been in the House for 12 and 10 years, respectively. McCarthy has been in the House only since 2006, but was effectively appointed by his predecessor of 28 years, and former boss, Bill Thomas—-the Chairman of the House and Ways Committee pre 2007.

Who are these guys kidding? Congress has a 70% disapproval rating. The more we see of them in this context, the more worrisome is our country’s condition. Here is some friendly advice to our 3 amigos and the GOP Congressional leadership promoting this. Don’t insult your boss (“we the people”) with your exhibitionist, effeminate and embarrassing preening. It will just make us madder. If we vote for you, it is because we have no other choice. We want you to do your job without out this farcical glibness. In fact, here is one time our president can give you some sound advice: “just plug the damn hole.”

See 

Michael Rulle, at

David Horowitz's NewsReal Blog

What Constitutional Right to Build the Ground Zero Mosque?

The countless articles and commentaries about the proposed Mosque near Ground Zero never fail to include the proviso “no one disputes their constitutional right to build it……….”. From the always odious Keith Olbermann to the always entertaining Ann Coulter it is de rigueur to make this point when discussing the proposed Mosque. Why we need to constantly reference this point is beyond me. Our original constitutional right to dispose of our property at will is derived from the Fifth Amendments Takings Clause. But as all property owners in America are aware, our rights to do what we want with our property has long been superseded by local zoning boards, the EPA, local historical committees, farm usage regulations, and countless other restrictive powers of Local, State and Federal Government. Plus the Supreme Court ruling in Kelo versus the City of New London expanded the concept of eminent domain to include taking property from one group of private citizens to give to another group of private citizens.

While I deplore this development almost universally, it is not the case that, de facto, there is a constitutional right to build the Mosque near ground zero. It is merely the case that the Bloomberg Administration’s Zoning Commission decided to approve it. If you doubt this, I suggest you try to convert where you now live into a Church.

I am not in the real estate business. But I own a house and an apartment. At various other times I have either owned or considered buying properties. In not one of my personal situations was I not interfered with by some entity of government to prevent me from doing something I wanted to do on any property I owned or wanted to own. It is useful to point out a few items to prove just how limited our property rights truly are. My point is to show that indeed, the Mosque Builders were granted explicit permission to build, but they have no “right” to build. My examples are all trivial (except perhaps one), which is precisely my point.

I wanted to build my current driveway 10 feet to the right of where it is now on my 5 acre lot. My then “neighbor” objected as I apparently violated some “100 foot rule”. When I built my house I wanted slightly higher ceilings. I was prevented because I would have violated a height rule. I have 80 foot trees surrounding my house and have by far the smallest property in my “neighborhood”.

I bought a sofa for my apartment in NYC. It is just a sofa, but apparently on the slightly large size. It could not fit into the very small elevator of the apartment building. There are enormous windows in the building and the “super” suggested we could easily have it lifted it through the 3rd floor window of the vacant apartment across the hall from ours. We were prevented by the city because our’s is a “landmark” block (off 3rd Ave!) and we might have “risked” some damage

I choose to highlight these things, not because it impacted me in any material way, but rather precisely because they did not and to demonstrate the level of micromanagement and power local zoning officials have and exercise.

My last story (that I will write about, there are many more) affected another property owner from whom I was willing to buy a property and which was not trivial in the slightest. The property is in western NJ and is 150 acres. The asking price was remarkably low (hint). It supposedly was zoned for 2 homes and also for building all necessary “outbuildings” to operate a horse farm/business. This property is located in an area of NJ that has many other such properties. At the time, we were considering going into business with a friend of ours, who currently operates a large stable. Without getting into all the Kafkaesque details of the situation the then owner faced, suffice it to say that 3 state bodies, each independent from the other, would have had to approve any plan. I hired a real estate lawyer familiar with the inanities of NJ laws, to see what the situation really was. His conclusion was he doubted I could ever get pre-purchase approval for any construction—even being able to build just one house.

The woman who owned the property eventually filed bankruptcy as she bought it at a price that implied you could build on it. The bank still owns it, last I saw, and is offering it at 30% of what she paid for it.

So, while I am sure the Mosque builders can reference some set of constitutional precedents, I can assure you they were granted affirmative permission by the Bloomberg Administration to build it. So lets forget about their “right” to build anything, as real estate rights have been conditional in this country for a long time. It is obvious that building this Mosque is designed to mock the United States as well as perform a victory dance near the graves of the 9/11 victims. Those who defend it are a disgrace.

Barack Obama: Running Out of Time

It is hard to believe it has been only 19 months since the president’s inauguration. But in “political time” it has been much longer. When a president seeks “fundamental change”, and actually means it, political time expands as he attempts to break through decades of built up political boundaries. Remember how Obama bragged he accomplished health care reform when every president since Teddy Roosevelt failed? Putting aside the absurdity of the statement itself, it demonstrates that our president thinks in terms of centuries, not mere 4 year election cycles.

The electorate has already lost faith in his vague and mindless rhetoric and now is beginning to get irritated. Voters prefer more mundane objectives, like increased opportunities for a job. And they are not too hung up on whether they are “green” or not. His stimulus predictions failed; hishealth care bill was and is opposed by strong majorities; projected deficits are at record levels by any measure; and unemployment won’t decline. Yet he continues to speak the language of the losing gambler, by doubling down on policies which have not worked. The next act in his bag of tricks is to hike taxes.

Although he tried to subtly sneak in the message during his Oval Office speech, no amount of blaming Bush for the financial crisis or the cost of the Iraq war will cut it. He re-hired Bush’s Secretary of Defense, his Fed Chairman, and his Treasury Secretary’s top partner after Bernanke, Tim Geithner. He oversold the crisis and then oversold the solution in order to “fundamentally change” America—-which in turn helped advance the crisis. Without getting too much into the “oversold the crisis” concept, it is helpful to note that all of the top 10 banks (except Citicorp) were profitable in 2008, the year of the crisis. Profits increased substantially since then. The Fed, which purchased many assets from these banks, has also been “profitable”. The “bailouts” themselves were overstated and unneeded—-but that is another story for another day.

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Just Another Long Day's Journey Into Night?

In the wake of the successful Tea Party rally in DC, small(er) government proponents can be forgiven for a sense of heightened optimism about the future. While the Glenn Beck rally was lighton politics, its audience knew why they were there. But halting, let alone reversing, the massive federal and state bureaucracies will require enormous and persistent political will by the populace. Is there enough consistency of opinion within this nation to slow the growth of government? Let’s hope we get the opportunity to find out. But it’s usually the other guy’s handout we want to abolish, not our own.

It is easy and correct to critique the performance of Obama and his cohorts in Congress. They have extended the relative size of government as well as its regulatory reach beyond any of their predecessors since FDR. These have combined to create a virtual Rubik’s Cube maze which business, especially small business, will be compelled to navigate. This diminishes wealth for all in the name of fairness for all. Obama’s Rasputin, Rahm Emanuel, was tactically accurate when he said “you never want a serious crisis to go to waste”, particularly when it was so easy, in the public’s eye at least, to pin the crisis on Bush and Company.

The good news is they only succeeded in passing 2 out of 3 of their primary initiatives (Stimulus, ObamaCare, but not Cap and Trade), even if public opinion caught up with the ruse before the health care bill passed.  As “President” Jack Nicholson once said in the prescient movie parody of the current administration, Mars Attacks, “that’s {still} 2 out of 3, and that ain’t bad”. Obama’s budget spending is north of 25% of GDP, the highest since WW II. Those who believe the government is as efficient as the private sector (“justice” adjusted), may think this is not a problem. But an increasing amount of people correctly recognize its dangers.

While the Obamacrats have raised the bar of fiscal irresponsibility to all time highs by any measure, (with the assistance of the Bush Administration in the Fall of 2008), the history of the Republican Party in slowing or limiting government’s growth is not better than the Democrats. I think it is helpful to read that sentence again. Henry Kissinger’s great line about University politics (“the politics are so vicious because the stakes are so small”) is unfortunately applicable to national politics. The differences of opinion are really around the margins, at least as it relates to outcomes if not ideology. Federal expenditures as a percent of GDP have been as likely to be as high under Republican administrations as Democrat.

(Continue reading at Newsreal)

The Ever-Growing Government: Just Another Long Day’s Journey Into Night?

Idiomics and the Obama Administration

President Obama’s Chief Economics Adviser, Christina Romer, resigned last week. Private sector jobs declined about 130,000 or so according to the July jobs report. That’s what she deserves for supporting political policies in stark contrast to her own research The Macroeconomic Effects of Tax Changes where she states in the abstract: “…….tax increases {designed} to reduce [an} inherited budget deficit or to promote long term growth…..are highly contractionary. The effects are strongly significant {and} highly robust…..The large effect stems in considerable part from a powerful negative effect of tax increases on investment”. As Reason Magazine’s Tim Cavavaugh noted re: Ms. Romer, “Now how will you get your soul back”?

Further, and as ludicrously, informal Obama economic advisers Mark Zandi and Allan Blinder also declared that the $800 billion stimulus “worked” even though its predictions failed. This is one reason Macroeconomic science is viewed with such disdain. For those interested in the statistical and logical errors inherent in this declaration please read economist Arnold Kling’s commentary How the Blinder-Zandi Study Was Done . In short, Zandi/Blinder “corrected the model’s past forecast errors, so that it would track the actual behavior of the economy over the past two years exactly”. This is generally called “data fitting” and has been the scourge of the macroeconomics profession for decades. Zandi’s studies are simply fitted mathematical “models”, not evidence empirically deduced as at least was the case in Romer’s tax study referenced above.

In an idealized world, citizens disagree about political policy for one of three reasons; 1) core moral principles; 2) differences of opinion about utilitarian/practical outcomes relative to alternative policies; and, 3) the self interest of various constituencies, usually using oneof the two other reasons as rationales. Sometimes all 3 reasons can be in agreement or stark disagreement. For example, what if we could harvest body parts from convicted serial murderers to save the life of multiple children in need of transplants? (This was the theme of the television show “The Closer” this week). Closer to political reality perhaps, what if we could harvest “stem cells” from unborn children to save the lives of the “born”? Or, what if Steve Jobs’ self interested insatiable desire to be the global gadget king creates a secure life for millions of employees and vendors without taking away their liberty?

In matters of economics, it is reasonable to believe all 3 of these reasons can generally be in harmony. This was assumed by our founding fathers to be possible under the right set of constitutional principles and laws. The moral principal of individual freedom, the “selfish” pursuit of life, liberty and happiness, and the Adam Smith derived belief that competition by the many produce better utilitarian results than planned actions by the few, were all taken for granted by our founders. There were no Marxists or Socialists in their time, but there was Mercantilism, anti-free trade and government supported monopolists. For reasons known only to Obama, Pelosi and Reid they have rejected our founders’ notion in favor of more central planning.

My fellow New Jersey citizen, Michael Fleischer, a small business owner, details in a highly intuitive WSJ editorial on why business isn’t hiring. Rather than summarize what he wrote, let me provide some evidence that Fleischer’s example is not merely an anecdote but a representative condition as predicted by Christina Romer in her own study. The following facts can be found here on the Small Business Administration website. We have all heard these kinds of statistics before, but it is worth focusing on them again as election time approaches.

One half of all private sector jobs are provided by small business, defined as companies with less than 500 employees. More importantly, 64% of all net new jobs are created by small businesses. The word "net" is small but dense with meaning. "Net" means the sum of all people hired minus all people fired/quit/retired. The gross numbers hired and eliminated are multiples more. Each year approximately 600,000 new companies start up and 600,000 companies close down. Our economy is one gigantic pool of "business experiments" where extraordinary competition results in only the most effective and efficient surviving.

How does any intelligent person believe that government, i.e., non business bureaucrats choosing who should receive the people's dollars, can possible create better outcomes than our competitive system? Does one really need a degree in economics to perceive this? Imagine if the government chose who got to play football for Notre Dame or who got drafted by the NFL? Or, for that matter, which sport or music Americans should prefer? Its obvious in these examples, but when applied to "economics" our eyes glaze over. Yet, under the Obama administration all marginal increases in "investment" has come from the federal government.

Small business as a whole is successful despite the fact that our government's policies favor big business explicitly. This has always been true, but has reached new heights under the Obama administration. As Fleischer showed in his WSJ article, small business is especially burdened by regulation. On average it costs &15,000 to comply per worker versus large firms $10,000 per employee. This data is from 2005. Compliance, or feared future compliance, with the new health care mandate, potential CO2 mandates, potential increases in SS taxes, and higher marginal tax rates all lead to the lack of investment Romer predicted in her study and Fleischer sees in his business. But the Zandis, Krugmans and Obamas of the world just say lets do even more of what has not worked.

The Federal Reserve produces a quarterly report called Flow of Funds - Z.1. Page 2 tells a remarkable story. Our average annual growth rate in total debt outstanding (public and private together) has been the lowest during the last 5 quarters than any of the last 10 years. But government debt growth has been the highest since WWII for such a sustained period. Business has had negative growth. Debt can be seen as a proxy for investment. Small Business in particular has declined approximately 9% while the government has increased over 20%--(see page 16). That is an enormous swing from the productive private sector to the self-evidently unproductive public sector.

I suppose one should raise the question of which is the cause and which is the effect? Did Government have to step in and invest because the private sector would not? Or did the Obama Government announce its preference for increased spending, borrowing and taxation first, thus causing the uncertainty and decreased investment which Fleischer outlines? Given that Obama's own model failed in its prediction, I am going with Romer's study and-----as Sarah Palin often says-----the "common sense conservative" answer. Loudly trumpeted Big Spending, Redistribution, and Increased Taxes made small business pull back investment leaving the field wide open for the government to do such brilliant things as subsidize the absurdly expensive Chevy Volt, create the wealth destroying and insanely comic "cash for clunkers" program, discontinue deep water drilling in the Gulf, continue its subsidized support of the mortgage market by the Fed, Fannie Mae and Freddie Mac, and so on and so forth.

We need to get rid of as many of these people as possible in November.

(please go to David Horowitz' Newsreal Blog for other posts)

McChrystal Firing Will Let Loose the Hounds

President Barack Obama on Thursday called on his fractious Afghanistan team to unite following his decision to replace General Stanley McChrystal as commander of the war effort.

Having just narrowly averted a military coup by firing McChrystal, he will need to get ready for more “we are losing the war in Afghanistan” stories. Remember Bora Bora? As John Kerry mindlessly noted—again—as late as December 2009, we never would have had to increase our troop strength in Afghanistan but for Bush having “failed to capture Bin Laden in Bora Bora” in December 2001. That was proof that Bush was losing the war in Afghanistan, caused by his sideshow war in Iraq. During Kerry and Obama’s presidential campaigns, they were in love with the notion of Afghanistan as the “smart” and good war, but there are no signs of the imminent capture of Bin Laden on the horizon. Talks of a “good war” have also long disappeared from the Democrats’ vocabulary. Afghanistan has morphed into a strategic muddle. The hopes we had about Karzai forming a strong central government were dashed a long time ago.

I would like to see Obama articulate why we are in Afghanistan. Is it to capture Bin Laden? Destroy Al-Qaeda? Nation build? Prevent Pakistan from being taken over by the Taliban? What is its purpose? Are we losing? This is a war about which he has said the word “victory” does not apply; does that mean the word “losing” also does not apply?  I am open to a strongly reasoned argument. But as with his immeasurable and ridiculous “jobs saved or created” construct, a war which one cannot apply the word “victory” is insanity. But this is how our “genius” president thinks. The reality is he just wishes it would all go away. But it won’t. He has no understanding or vision about what the United States’ role in the world should be. And now the spotlight is going to get brighter in Afghanistan.

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Has Anyone Actually Read the Rolling Stone Article?

No, not the Lady Gaga story--who hasn't read that? I mean the hit job on General McChrystal.

For the first time since 9/11, we finally have universal “bipartisan” support for something—-the firing of General Stanley McChrystal. Every politician and pundit seems to agree. The Right calls it a personal tragedy for McChrystal. The Left sees it as an opportunity to change Obama’s Afghanistan war policy. But all agree his firing is of paramount importance to protect the principle of civilian authority over the military.

Maybe. But what shines through in this affair is the unctuous weakness of some in our political class. This includes President Obama and Senators McCain, Lieberman and Graham. Instead of defending the General, they used the Rolling Stone article to project their own agendas. The media’s virtual unanimous agreement is intellectually lazy. The Left has been utterly disinterested toward the Afghanistan war since “Bush-Cheney” were no longer in charge. Sure, lets fire a General. The Right appears stuck in a misdirected Truman-MacArthur time warp. I admit ignorance of the proper protocol between the military and the media. But given the amount of “embedding” that the Pentagon permitted in the Iraq war, I can only assume they are supportive of its key personnel explaining its perspective to the press.

So “lets go to the videotape” and analyze this article. Author Michael Hastings spent a month with McChrystal and his staff of 10. This was longer than anticipated because Hastings arrived in Paris April 15th just as the flying ban was implemented due to the Iceland volcano eruption. Yet in a month, he manages to dredge up only 4 or 5 semi-controversial quotes from 11 people in a 10,000-word essay. Press secretary Robert Gibbs assured us these quotes made the president “furious”, which the Left wing media has been clamoring for from Obama. Finally, Obama would get his chance to “show emotion” and “kick some ass”. This is the same “furious” president who does not believe the word “victory” applies to Afghanistan, and who managed to apologize on behalf of Ahmadinejhad as the latter was shooting Iranians in the street.

Much of the article is a screed by Hastings opposing the war in Afghanistan and the Obama strategy of counterinsurgency. McChrystal, who voted for Obama, is a proponent of this strategy and is why Obama fired his predecessor, Bush appointee General David McKiernan, in the spring of 2009. Lets not forget Obama’s presidential campaign assertion that Afghanistan was the “good war”. Comparisons with MacArthur and Truman, the basis for the civilian authority argument, are completely inapplicable. The latter disagreed on both objectives and strategy in Korea (MacArthur was right, but that’s besides the point). McChrystal and Obama, in principle it appears, have no disagreements on objective and strategy in Afghanistan. So why the “fury” based on the article?

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Obama: "Information Becomes a Distraction"

President Obama delivered a truly bizarre commencement speech at the traditionally all-black Hampton University on Mother’s Day. The overall speech was standard graduation day fare with a perfectly fine upbeat message. Go forth and contribute! However, the president somehow managed to insert two disturbing paragraphs, which effectively negated the speech’s positive message. They clanged jarringly in direct opposition to the main theme of the speech, revealing the paranoid thought processes of him and his inner circle. The first of these two paragraphs basically warned of the dangers of computers and the Internet. The second warned of the dangers of cable television and talk radio. He seems to believe a highly open and competitive marketplace of ideas is a new danger that, from his perspective, is an unfortunate distraction that must be overcome. These are distinctly undemocratic ideas and instincts.

Please continue reading at Newsreal

'Breaking Bad' and the Rise of the Sociopath

When, and why, did American television and cinema viewers first fall in love with the Sociopath protagonist? Perhaps the audience was always there, nascent and ready to be born. My current favorite Sociopath television show is AMC’s Breaking Bad, the story of an ordinary, albeit resentful and self-loathing, married man who breaks out of his bourgeois cocoon to become a Methamphetamine dealer. His bourgeois name is the aptly constructed “Walter White,” representing the plain vanilla nature of his high school Chemistry teacher life in small town New Mexico. His alter ego name is “Heisenberg” (after Nobel winning German physicist Werner Heisenberg), chosen by White, to represent his genius in making the purest and best “Meth” ever seen in the Southwest and Mexico. 

I think Coppola’s Godfather series created the modern heroic Sociopath. We rooted for Brando’s and Pacino’s characters, although Michael Corleone became unlikable by the end of Godfather II. Coppola was the first to romanticize the familiar character of the gangster in movies. But Quentin Tarantino perfected the generalized concept of the protagonist Sociopath. His breakout film was, of course, Pulp Fiction, a so-called dark comedy with such a wide variety of watchable sociopaths one could probably make a television series around virtually every major character in the film. In fact, the two strands of modern Sociopathic television and films can be plausibly traced to either Coppola or Tarantino. In the organized crime motif, for example, there is of course The Sopranos and the unfortunately canceled series Brotherhood. But shows like Dexter and Breaking Bad are in the dark comedy mode consistent with Tarantino’s sensibility. 

Breaking Bad is in the midst of its third season. It is really hitting its stride. When the show was first promoted prior to its first season, I had no interest at all in seeing it. The premise seemed ridiculous and unappealing. Walter White is the epitome of an underachiever. He has his PHD in chemistry but is somehow stuck teaching high school students who have less than zero interest in the subject matter. He is diagnosed with cancer, which his insurance will not pay for. So he becomes a Meth dealer. This is how the show was promoted. Not only did I not want to watch it, I aggressively had an affirmative dislike for such an amoral and stupid theme. Plus who wants to watch a show where the main guy has cancer? Real life is bad enough; does one really want to watch a television show about it?  (more at Big Hollywood…)

Geithner and Whitacre--"In Full and Ahead of Schedule"

Who cooked up this absurd advertising campaign crowing about General Motor’s lies that it paid back its taxpayer-funded loans “in full and ahead of schedule”? When I first saw the GM Ed Whitacre ad, I instantly knew this had to be some kind of trick. (GM Repaid Government Loan Ahead of Schedule). He strides toward the camera with a phony cheery optimism thanking the American public for giving them a “second chance”. I don’t recall choosing to give GM a “second chance”, do you? What I remember is Henry Paulson, George Bush and Timothy Geithner allocating funds from the bank TARP fund to “bailout” GM. New “private” equity chief, Barack Obama, was quite happy to keep the program going and assigned oversight to new Treasury Secretary Tim Geithner.

GM was already a dead company walking years before they seized on the TARP opportunity. Even during the height of the economy they were hemorrhaging money. In the four years beginning in 2005 and ending in 2008, General Motors lost $10 billion, $2 billion, $39 billion, and $30 billion, respectively, in each year. That’s a lot of change. The economy was making record profits, but GM was making record losses. Banks and lenders were hoping against hope that some kind of miracle would fix GM’s problem and keep them afloat. That miracle was you, otherwise known as the American taxpayer----continued at David Horowitz's Newsreal.com  Geithner and Whitacre – “In Full and Ahead of Schedule” o

The Goldman Sachs Misdirection

The Goldman Sachs’ affair is filling up the news cycle. Compared to the year long health care battle, it seems trivial by comparison. But as a symbol for the absurdity of our times, it is informative. It most reminds me of the AIG compensation dust up about a year ago. Let’s take the least important issue among a list of enormous issues and make that the centerpiece of a political campaign.

There is plenty of crony capitalism to discuss and critique, but the Democrats, Carl Levin in particular, seem most shocked to have discovered that for every buyer there is a seller. The Republican Party doesn’t know quite what to make of this either. On the one hand, they don’t want to appear to be attacking free markets, whatever is left of them in our financial sector. But on the other, who wants to stand in support of a third string erstwhile “master of the universe” such as is 31 year old Fabrice Tourre? Republicans often have had the unfortunate habit of becoming strong free market supporters primarily in response to Democratic actions. But the AIG bail out and the TARP bill, sponsored by the Bush administration, were classic anti-free market policies.

I have no opinion on the specifics of this particular set of transactions referred to as Abacus that is under investigation by the SEC. The courts will decide if Goldman was fraudulent. I do have an opinion on what our Government’s priorities should be, however, and obsessing over this series of transactions is not one of them. These were deals transacted in 2006 and 2007. If Wall Street was so prescient, how did they manage to achieve $1 trillion of losses in the mortgage market (give or take $500 billion or so) during 2007 and 2008? Goldman may be sleazy, but they did not cause the mortgage crisis.

Which brings us to the main point, the so-called financial reform bill, a non sequitur sponsored by Senator Chris Dodd of Connecticut, which the Goldman indictment is supposed to make us support. The first question that comes to mind is how can Senator Dodd still be around? Dodd was the number one beneficiary of campaign contributions from bankrupt but bailed out mortgage entities, Fannie Mae and Freddie Mac. As late as the summer of 2008, Dodd was still insisting that two of the biggest buyers of sub prime mortgages were financially sound and fundamentally strong. Dodd’s conflict of interest was certainly greater than dopey Fabrice Tourre’s.

Do we really have to go over all of this again? Government policies at the state (California most among them with their restrictive land use laws and mortgage lending rules favoring borrowers) and federal level (for example, inconsistent and self contradictory capital rules, aggressive federal support for increased home ownership, etc.) led to what turned out to be a large housing bubble. When Wall Street discovered it had mortgage inventory it could not sell, their prices dropped precipitously.

The firm left holding the largest bag of mortgage “sh…..t”, a term which seems to appear in many Goldman e-mails, was insurance giant AIG. Firms like Goldman Sachs extended enormous amounts of credit to AIG, as the drop in mortgage prices led to a liquidity and solvency crisis for AIG. The liquidity crisis was made worse by Goldman and others insisting that AIG come up with cash immediately to “pay back” what AIG owed them from a series of price guarantees AIG made on many of these mortgages. (For a more complete analysis of this, please read my  Anatomy of a Bailout .

Since AIG could not pay, Goldman and others would take substantial losses for their stupid decision to expose themselves to such enormous credit risk to one company. Goldman alone was owed about $12 billion by AIG. But Goldman’s former Chairman, Henry Paulson, (no relation to the John Paulson involved in the current Goldman indictment), was George Bush’s Treasury Secretary. And in what may have been the biggest “untruth” mouthed by a government official in a long time, Paulson insisted that AIG be bailed out by the Government or there would be world wide calamity. AIG was bailed out but it did not prevent calamity at all, but rather enhanced it. Secretary Paulson somehow left out the part about the bailout money being used to pay for Goldman Sachs’ (and others) losses.

So now we have a “financial reform” bill that promises to make sure such financial travesties never happen again. Yet the two main components of the bill, like so much of what Government does, fails to address the main problem. The most ridiculous of the proposals is a pre-funded bailout “fund” that will supposedly be used the next time real estate prices drop 50% in California. The first thought that comes to mind is what will this “fund” invest its dollars in between now and the next financial crisis?

Like TARP’s bailout of GM, all beggars under the sun will have their hand out. Perhaps it can “invest” in “Green Projects”. Or Medicare. This fund is simply another Obama Rube Goldberg tax. Even if this were not the case, why encourage behavior that needs to be bailed out? The AIG and TARP bailouts should never have occurred and were a taxpayer rip-off. This proposed law simply codifies such bailouts in the future.

The second proposal in the bill is to eliminate the over-the-counter derivatives market by requiring a separate entity (a “clearinghouse” effectively owned by the banks) to be the counter party to all derivative trades. This would mimic what the current Futures Exchanges now do for standardized derivative contracts. But “derivatives” did not cause the financial meltdown. Bad credit policies by banks, inconsistent capital regulations, and government-sponsored housing incentives at the state and federal level did.

Supporters of financial reform feel they need to “do something”. The “something” they should do is guarantee that they will not bail out firms in the next crisis. Pretending Goldman’s Abacus deals had anything to do with the financial crisis is willful misdirection. Supporting Goldman Sachs in this affair is also beside the point. They and other so-called too-big-to-fail banks are direct beneficiaries of implied Government sponsored support. Eliminating this support should be the primary focus of conservatives, not diving into the weeds of a 4 year old CDO deal---please see this essay on David Horowitz's Newreal blog--The Goldman Sachs Misdirection

Obamacare: Let Us Not Talk Falsely Now

It took 30 years to put limits on what welfare recipients can receive. The entitlement state mentality sometimes seems built into the DNA of advanced economies. Repealing the Orwellian sounding “Patient Protection and Affordable Care Act” is a pipe dream. They won. The earliest this can even be addressed is the Spring of 2013. A Constitutional challenge is a desperation ploy and won’t work.  I hope the States go for it, of course, but it seems implausible. Change the word “fine” to “tax” and they solve half the constitutional problem.

Ten days ago Judd Gregg also waved the specter of effectively shutting down the Senate through a never ending process of amendments during the reconciliation process. But that tactic lost its sting when Obama fake promised an executive order limiting abortions to buy Bart Stupak’s vote. Judd’s threat was all swagger and no mojo.

Republicans should have supported Health Care Reform when in power from 1995-2005. They didn’t, at least not with a quarter of the intensity of President Barack Obama and Speaker Nancy Pelosi. But that’s yesterday’s news as is Obamacare. I am not suggesting that Republicans don’t have something to run on this Fall, nor that it won’t be politically successful. But opposition to Obamacare is not uniform in nature, nor even fully based on free market principles. The most vocal opponents have been Medicare recipients; not exactly proponents of sustainable market based solutions to our health care fiscal problems.

Our current highly regulated health care system, with its massive Government intervention and poorly constructed incentives, is not sustainable. This is obvious. But we have seen this coming for a long time and have done nothing except add to the problem. True reform would have included: tax equalization of all forms of health insurance, taxing health insurance benefits (while lowering marginal tax rates), restricting  insurance mandates, allowing free insurance markets across state lines, tort reform, gradually increasing the Medicare eligibility age, and weaning the nation off a third party payment system.

Merely unwinding Obamacare does none of this. Republicans have never been passionate reformers of health care when in power. It is easy to be passionate about goals and principles when you know they will never be voted on, but much harder when they will be. Republicans have not been successful at persuading people that market based policies work best in health care. This failure made us vulnerable to what has transpired. Of course, Obamacare simply extends the errors of Medicare and other parts of the system to the population as a whole. It’s like being caught with one foot in quicksand and solving the problem by going waist deep because “something must be done”.

Conservatives must not get hung up on over turning Obamacare per se. Pick your cliché, but that horse has left the barn. We have 3 years to prevent further damage to free market principles. Let’s focus on that. The Conservative Movement’s political message must be forward looking, affirmative, relentless and rest squarely on “common sense market based solutions”. This includes health care reform, but not to the exclusion of all else. Then, if we are lucky, conservatives will have returned to power and maybe this time we can begin reestablishing these principles in all areas of our public policy.

But whatever we do, let’s not get stuck in rewind howling at a wind that just blew us down. Let’s get up, dust ourselves off, and make sure these guys don’t pass cap and trade by the summer. Please see post at Newsreal

Breaking Bad on Health Care

The pretend “Demon Pass” vote in the House looks like it will pass Sunday. All the ifs, ands, buts and maybes seem to be breaking the Democrats’ way. It is fitting that AMC’s award winning Breaking Bad series has its season opener Sunday night. The show’s protagonist, average and ordinary high school chemistry teacher Walter White, has lung cancer. I always thought public school teachers had the best possible health insurance. Apparently there was some kind of glitch in his. Or New Mexico’s education board assumed he had a pre-existing condition.

The plot line for the first 32 episodes has centered on White’s desperate attempt to get money. He needs to pay for his treatments and leave some money for his family in the event of his death. What can he possibly do? He has a sudden insight. He will become a crystal meth dealer. But not just any crystal meth dealer; White uses his chemistry background to produce the finest and purest methamphetamine the DEA (who is led by White’s brother in law) has ever seen in the Southwest. Ultimately, White bungles his way toward a million dollar score. The fact that he needed to permit the choking death of his drug-addled partner’s girlfriend, (which in turn lead to a catastrophic airplane crash in the last season’s final episode) did lead to some misgivings. But not much.

Read more here.....

The Bar of Treason and the Al Qaeda 7

The most important fiscal bill in our country’s history is on the verge of being passed or defeated. It dominates all news as it should. It is opposed by a double digit majority of the people and strongly opposed by a 2-1 margin over those who strongly support it. There are not enough votes to pass the bill. Each House of Congress has put forth unprecedented procedural proposals to pass what other wise would not pass. This is in addition to the various bribes that we have publicly seen and are likely being proposed currently. Each day this week the president has chosen to lie to the public (by double counting Medicare cuts, comparing 5 years of spending with 10 years of taxing, etc., etc.) to promote a monstrosity. The bill is bad enough. But the damage to our way of governing is even worse. President Barack Obama, Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid are corrupt to the core.

But this is not the only area where the Obama administration has established and supported corrupt and dangerous practices. Debra Burlingame and Thomas Jocelyn wrote an opinion piece in Monday’s Wall Street Journal on some of the defense practices on behalf of the “Gitmo” prisoners by the Law Firm Paul, Weiss, Rifkin, Wharton and Garrison.Legislation passed in 2006 and subsequent rulings by the Supreme Court permit detainees, under certain conditions, to petition the court in support of habeas corpus rights. However, without getting into the details of what qualifies as a legitimate appeal, Paul, Weiss, and Rifkin engaged in other activities which arguably flirt with Treason under Article 3 of the Constitution. Treason is defined by Article 3, Section 3 as such.

Section 3. Treason against the United States shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort…Read more here...

You Know What Your Car Costs, But Not Your Heart Exam

The health care “debate” is made most irritating by the obvious things ignored. As we have grown accustomed to hearing ad nauseam, health care represents 17% of our economy. I have no idea if that number is accurate. Perhaps one day I will look into it. Whatever the number, we know it is big. Yet health care consumers have no idea what anything related to health care actually costs. For all practical purposes it may as well be free. Consequently, we consume too much of it and will continue to do so unless some simple changes are made.

We pay an upfront cost for insurance (or are given a tax free benefit from an employer or the government) and in exchange we get a plastic card with an insurance company’s name on it. When we go to the doctor, the hospital, or the pharmacy we simply hand them the card upon entering. Whether we fill a prescription for fish oil or get brain surgery we simply hand in the same card. Some administrator fills out forms and that’s that. We don’t even have to sign a form in recognition of the cost of the procedure. How is it remotely possible that such a system can function efficiently? There is no other part of our economy that operates this way. Milton Friedman has written about this topic. Thomas Sowell has written about this (Alice in Health Care) as has John Stossel. Even I have written about this What Next: “Universal Food Insurance”?.

(Continue Here)

Healthcare Summit: Reconciling the Vile and Depraved

“Preacher was talking there’s a sermon he gave

He said every man’s conscience is vile and depraved

You cannot depend on it to be your guide

When it’s you who must keep it satisfied

(Bob Dylan—The Man in the Long Black Coat)

I really like Joan Osborne’s cover of this Bob Dylan song. What has me thinking of “vileness” and “depravity” this crisp and sunny March 1, 2010 day? Last Thursday’s all day health care talkfest. I had neither the time nor the inclination to watch the “Blair House Health Care Summit”. But I did get to watch countless video clips of “Prime Minister” Obama at the meeting. I also read and watched assorted commentaries and opinions about which side scored the most political points.

Why did Obama insist on putting us through this nonsense? This was promoted as a good faith effort to reach “common ground” on how the Government should control 300 million people’s health care. The results of the summit, of course, showed us just the opposite. Each side’s position hardened in the course of the meeting, as all sentient beings knew would happen—and in fact should have happened. Many so-called good government types think this is a travesty for some reason. While the current health care system is clearly suboptimal, Prime Minister Obama’s proposal would make it much worse. Sometimes the two political parties really do fundamentally disagree. read more…

The Ideological Rigidity of Ron Paul

Part 1 of my Ron Paul essay received more attention than I expected. His supporters are intense, to say the least.

As stated in that article, there are many things about Paul to like. But his monetary policies and his political rigidity are not among them. I do not dismiss the importance of sound monetary policies. Nor have I been pleased with the actions of the Fed over the last 2 years. But promoting a gold standard and competing domestic currencies are not solutions to our nation’s economic problems. I reiterate my main point: What is required are sound fiscal policies. With sound fiscal policies, sound money is likely to follow. We primarily have a fiscal policy problem and I prefer our politicians keep their eye on that ball.

But Paul has expressed opposition to other policies which I find objectionable. For example, he bases his support of certain trade agreements on the elimination of various transnational organizations such as the World Trade Organization, the IMF, the UN and a bunch of other alphabet city groups. These groups are not going anywhere soon. Paul is correct that certain free trade agreements such as NAFTA are far less than perfect. But opposing the better in the name of the perfect shows a predilection toward ideological rigidity. Paul opposes NAFTA and many other trade agreements that have been proposed. Further, Paul seems to believe support for such institutions puts us on the path to European style political unions with other countries. His paranoia/obsession with what he literally calls the NAFTA superhighway is an example of this. Whether the form such highways take, (as proposed by groups like NASCO for example), are optimal I wouldn’t know. But I am not afraid that our sovereignty is threatened by the existence of highways that more efficiently link North America. Sorry Paul fans, but this is “kook think”.

I agree with Paul that we subsidize illegal immigration and this should be stopped. But I support a far more open and expansive legal immigration policy than does Paul. As a libertarian, it is surprising Paul does not. He used to have this perspective but it apparently was unpopular during the 2008 election cycle, when he changed his opinion. He became more obsessed with keeping Mexicans out of America than with making the United States the place where opportunity abounds for all peoples. He sounds like Pat Buchanan again. One can simultaneously oppose being the welfare state for the world’s poor while supporting expansive immigration policies for those who seek opportunity. When it comes to immigration, Paul thinks like a “zero-sum” economics policy maker—the usual resting home of the far left. While Paul is not the only conservative who supports building a fence along our southern border, I am not one of them. This is a transparently absurd concept. He has no coherent immigration policy. This country has too many “third rails” in politics to be sustainable and immigration policy is one of them. I am surprised more libertarians have not called him on this.

Paul does promote many policies I support. I am sure I can write articles about other candidates whose policies I do not fully support, but who I could vote for. When you toss in his foreign policies, however, the total package which is Ron Paul is unacceptable to me.

Ron Paul Emerging as Ross Perot's Doppleganger

Ron Paul’s straw poll “victory” at last week’s Conservative Political Action Conference was surprising. It leads one to believe conservatives retain the ability to snap defeat from the jaws of victory this coming Fall. Ann Coulter reflects the opinion of many conservatives when she claims agreement with Ron Paul on almost all issues except for foreign policy goals. Paul, who has Pat Buchanan isolationist tendencies, claims to be an economic libertarian and has many credentials, which support that claim. He is a member, for example, of the Ludwig Von Mises Institute. Von Mises and, later, F.H. Hayek, contributed greatly to the intellectual debate demonstrating the inherent weakness of national central planning as an economic organizing principle. Paul supports smaller government, balanced budgets, less entitlements, and lower taxes. He wants the private sector to drive economic growth. As far as his economic policies are concerned, what’s not to like?  Read More

State of the Union: Lame Duck Rising

Even Obama, Biden and Pelosi seemed bored during the State of the Union Address. Obama couldn’t even gin up enough energy to discuss “Gitmo”. But it does not matter what he said. It’s all over for his presidency.

The Democrat Party now understands just how bad they blew it in 2009. This is good for the country, although bad for their party. They were the proverbial “dog with a bone” peering at its reflection in the water. The Party saw an illusion of maximum gain and went for the second bone—-and now all is gone. They sought maximum change in health care, maximum change in energy policy, maximum Miranda rights for terrorists, and maximum deficit spending. But the American public does not want any of it. Consequently, Obama may have set the land speed record to “lame duckness” by any president in history. read more…

Scott Brown's Victory: Grandiosity Takes it on the Chin

“I mean in a way Obama is standing above the country, above—-above the world, he’s sort of God” (Evan Thomas, Newsweek)

When the Intrade betting line was 83-17 in favor of Scott Brown, (at 3 pm Tuesday), I was still suspicious. Democrats outnumber Republicans 3-1 in Massachusetts. But the simple message of Scott Brown did prevail. One can legitimately call his win “historic.” It felt like a mini-presidential race. Brown was in the right place at the right time with the right message.

So much of life is unpredictable. In the grand scheme of things, we control very little of our circumstances. Sometimes the best one can do is respond when given the opportunity. We can each imagine our favorite sport’s analogy, so apt for this election. The conditions under which Brown was running, however, was ripe with opportunity and he responded. read more…

Is the GOP Worthy of Governance?

The Democrat Party’s “40 year majority” will come to a close 38 years early. The unbearable trinity of Pelosi, Reid, and Obama has managed to alienate a nation desperate to support new leadership. They accomplished this by an insistence on unwanted quasi-Socialist policies and an irritating propensity to lead with their chin in foreign policy. The era of Obama is over, even as his Health Care proposal will likely pass. But does this mean a new era of Republican leadership is about to begin? This remains to be seen.

Peggy Noonan, a former Reagan speechwriter who supported Obama, has views similar to many who consider themselves centrist. She now realizes her support for Barack Obama was misguided. Yet she is tempted to take a “pox on both your houses” approach. She remains skeptical of the Republican Party, as I imagine many voters do. In her recent opinion essay in the Wall Street Journal she states:

“The question isn’t whether they’ll win seats in the House and Senate this year, and the question isn’t even how many. The question is whether the party will be worthy of victory, whether it learned from its losses in 2006 and ‘08, whether it deserves leadership. Whether Republicans are a worthy alternative. Whether, in short, they are serious.”

I had grown weary of many of Ms. Noonan’s commentaries. Her support for Obama was predicated on an obvious misunderstanding of his politics, nature, and ideology. But her implicit challenge to the GOP is spot on. While the critique premised in her comment is not completely fair, without question Republicans are viewed with skepticism. After all, it was a Republican administration which brought us bailouts, supported expansionary and unsustainable housing policies, expanded domestic spending, proposed an immigration policy as unpopular as the Democrat’s current Health Care Bill and made “earmarks” a household name. Worst of all, the party seemed to lose any sense of foundational principles. Just what do Republicans stand for?

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