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Archive for January, 2011

I refuse to allow myself to get too excited about the chances of Obamacare ultimately being declared unconstitutional, but I’m definitely semi-psyched that this horrid law has been declared void by another federal judge. Here’s what the Washington Examiner has to say.

The full text of the decision from Federal Judge Roger Vinson is not available yet, but according to reporters who’ve seen the decision, he’s ruled the entire Patient Protection and Affordable Care Act unconstitutional. The ruling favors of the 26 state attorney generals challenging the law. The judge ruled the individual mandate that requires all Americans to purchase health insurance invalid and, according to the decision, “because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.”

By the way, my skepticism has nothing to do with the legal merits. I have no doubt that our Founding Fathers would be horrified by much of what happens in Washington, and there is no doubt in my mind that Obamacare is wildly inconsistent with the original intent of the Constitution.

But the courts have done such a lousy job of protecting economic liberty ever since the 1930s and 1940s that I’m afraid some appeals court will give Obamacare a free pass.

But, at least for today, let’s celebrate.

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I’m in Milan, at the office of the Institute Bruno Leoni, which overlooks the famous Castle Sforza and is almost within shouting distance of the remarkable cathedral.

This evening, I’ll be talking about how Italy should balance its budget by limiting the size of government, and my message will be identical to the one I give American policymakers. Restraining spending is the only pro-growth way of lowering red ink.

Italy actually has a smaller budget deficit than the United States according to OECD data, so that should make their job easier. On the other hand, the economy seems permanently stagnant, so revenues are projected to climb by an average of only 3.5 percent annually (compared to 7 percent in the United States).

Here are the specific numbers. The Italian budget this year is about €822 billion, while revenues are estimated to be about €752 billion. If the budget is frozen at current levels, the deficit disappears within three years. If spending grows by 1 percent each year, the budget is balanced in 2015. And if spending is allowed to grow only 2 percent annually, there is a surplus in 2017. If lawmakers can maintain fiscal discipline in subsequent years, they can begin to reduce the public debt.

This last point is important because Italian politicians are actually considering proposals to either levy a temporary property tax or a temporary tax on all assets, supposedly for the purpose of reducing the nation’s debt.

Some economists might argue that one-off taxes on assets are an efficient way of collecting revenue. After all, taxes on assets punish income that already was earned and do not punish earning income today or in the future. That is true, but such a tax would represent a blatant confiscation of private capital.

If the government is successful, this policy will undermine economic confidence and give Italian taxpayers an additional reason to move their money overseas. And since the politicians can achieve their alleged goal of debt reduction by restraining spending, there is no legitimate reason to steal wealth from the Italian people.

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While many of my posts mock American politicians for their foolish, short-sighted, and corrupt choices, I’m still very happy to be a citizen of the United States. Or, to be more accurate, I’m glad that I live in a nation that is part of Western civilization.

Consider what it would be like to live in Iran, where the government executes people for victimless crimes. Here’s part of a report from AFP.

Iranian courts on Sunday sentenced two people to death for running porn sites, prosecutor general Abbas Jafari Dolatabadi said, quoted on the Islamic republic’s official IRNA news agency. …Last December, Canada expressed concern over the reported death sentence handed down to an Iranian-born Canadian resident for allegedly designing an adult website. …Malekpour was detained in Iran after returning in 2008 to visit his ailing father. He was sentenced to death in December. The Netherlands froze contacts with Tehran after Saturday’s hanging of an Iranian-Dutch woman for drug smuggling, having initially been arrested for taking part in anti-government protests.

Iran also executes gay people, so the thugs running the government get bent out of shape about all sorts of private, consensual acts.

And let’s not forget that these nutjobs apparently are on the verge of getting nuclear weapons.

I rarely comment on foreign policy, and I don’t pretend to know what, if anything, should be done about Iran. My libertarian instincts tell me that any Western intervention would backfire. That being said, the world might be a safer place if Iran’s nuclear weapons program was disabled by an Israeli strike.

The best outcome, at least to my untrained eye, would be a domestic revolution. Some people fear this means instability, but Anne Applebaum persuasively argues in today’s Washington post that the uncertainty of change is better than the certainty of oppression. She’s commenting on Egypt’s turmoil, but I think her message has wide application. As such, one can only hope that the Iranian people rise up and overthrow the current regime. At which point, maybe gay Persians should be allowed to decide an appropriate punishment for the ousted tyrants.

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The title of this post doesn’t quite roll off the tongue like “It was the best of times, it was the worst of times.” But what can you expect when you compare politicians to the opening line of Charles Dickens’ A Tale of Two Cities.

That’s what came to my mind, though, when I noticed two stories next to each other on the Washington Post website. The first story was about a new lawmaker, infused with the spirit of the Tea Party, seeking to shrink the size and scope of Washington. The other story was about a career politician trying to expand the power of the federal government.

Let’s start with the good news. Here’s an excerpt from the Washington Post report about Senator Rand Paul’s bold plan to reduce the burden of government spending, including an attack on one of Washington’s sacred cows – subsidies for Israel.

The freshman Kentucky lawmaker unveiled his budget proposal this week that would make significant cuts in education, housing and energy while reducing money for wars in Afghanistan and Iraq by $16 billion. Paul’s plan also would cut some $20 billion in overseas aid, and he said he wants to eliminate the $3 billion the United States provides to Israel annually in foreign military assistance. “The overwhelming majority of Americans agree with Senator Paul – our current fiscal crisis makes it impossible to continue the spending policies of the past,” Paul spokesman Gary Howard said in a statement responding to the criticism. “We simply cannot afford to give money away, even to our allies, with so much debt mounting on a daily basis.” The latest economic forecast puts the deficit at a record $1.5 trillion. Paul explained his position in an interview with CNN on Wednesday, saying he respects Israel as a Democratic nation but feared funding an arms race in the Mideast.

Now, for the business-as-usual story, we have a story about the latest antics of Senator Charles Schumer, who has discovered a new “crisis” that requires action by Washington. Here’s a blurb from the Washington post.

U.S. Sen. Charles Schumer of New York says he wants the federal government to ban new designer drugs known as bath salts that pack as much punch as cocaine or methamphetamines. The small, inexpensive packets of powder are meant to be snorted for a hallucination-inducing high, but they are often marketed with a wink on the Internet or in convenience stores as bathing salts. The Democratic senator is announcing a bill Sunday that would add those chemicals to the list of federally controlled substances. …Schumer says the bath salts “contain ingredients that are nothing more than legally sanctioned narcotics.”

I confess total ignorance about “narcotic” bath salts, but even in the unlikely case that they should be banned, that is a decision for state governments. Last time I checked, the enumerated powers of Congress did not include authority to tell us what we can put in our baths or up our noses.

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In an interview with the Wall Street Journal, Clint Eastwood is asked about the new governor of California and uses the opportunity to advocate a simple and fair flat tax.

“But I’ll tell you when I liked him—and I wasn’t a registered Democrat—but I liked him when he was running for president [in 1992] on the flat tax. . . . A ton of economists, both liberal and conservative, have argued for a flat tax, but nobody’s ever had the nerve to do it. . . . It would simplify things, but simplification doesn’t seem to be in the human psyche.”

It’s always good to get endorsements from the right kind of celebrities. Years ago, the nation’s most infamous shock jock, Howard Stern, praised the flat tax. I used to listen to Stern every day, so that was a win-win situation from my perspective, but I realized that he wasn’t universally admired.

Clint Eastwood isn’t nearly as controversial, so perhaps he can be the public face of tax reform. Actually, maybe he’s the actor who should have been governor of California. Unlike Schwarzenegger, he would have known how to deal with greedy special interest groups.

I’m no Dirty Harry, so I can only push for a flat tax with words.

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Johnny Munkhammar is a member of the Swedish Parliament and a committed supporter of economic liberalization. He has a column in the Wall Street Journal Europe that does a great job of explaining how Sweden became rich when it was a small-government, pro-market nation. He then notes that his country veered off track in the 1970s and 1980s, but is now heading back in the right direction. I’ll have more analysis below these excerpts, but it is especially impressive that Sweden is ahead of America on key reforms such as Social Security personal accounts and school choice.

Sweden is not socialist. According to the World Values Survey and other similar studies, Sweden combines one of the highest degrees of individualism in the world, solid trust in well-functioning institutions, and a high degree of social cohesion. Among the 160 countries studied in the Index of Economic Freedom, Sweden ranks 21st, and is one of the few countries that increased its economic freedoms during the financial crisis. …Sweden wasn’t always so free. But Sweden’s socialism lasted only for a couple of decades, roughly during the 1970s and 1980s. And as it happens, these decades mark the only break in the modern Swedish success story. …The Swedish tax burden was lower than the European average throughout these successful 60 years, and lower even than in the U.S. Only in 1950 did Sweden’s tax burden rise to 20% of GDP, though that remained comparatively low. …The 1970s were a decade of radical government intervention in society and in markets, during which Sweden doubled its overall tax burden, socialized a slew of industries, re-regulated its markets, expanded its public systems, and shuttered its borders. In 1970, Sweden had the world’s fourth-highest GDP per capita. By 1990, it had fallen 13 positions. In those 20 years, real wages in Sweden increased by only one percentage point. …By the late 1980s, though, Sweden had started de-regulating its markets once again, decreased its marginal tax rates, and opted for a sound-money, low-inflation policy. In the early 1990s, the pace quickened, and most markets except for labor and housing were liberalized. The state sold its shares in a number of companies, granted independence to its central bank, and introduced school vouchers that improved choice and competition in education. Stockholm slashed public pensions and introduced private retirement schemes, keeping the system demographically sustainable. These decisive economic liberalizations, and not socialism, are what laid the foundations for Sweden’s success over the last 15 years. …Today, the state’s total tax take comes to 45% of GDP, from 56% ten years ago. Meanwhile, unemployment benefits, sick leave and early retirement plans have all been streamlined to encourage work. The number of people receiving such welfare—which soared during the socialist decades—has fallen by 150,000 since 2006, a main reason for Sweden’s remarkably sound public finances.

Sweden still has a public sector that is far too big, but the damage caused by bloated government is at least partially offset by very good policy in other areas. Sweden is actually slightly more free market than the United States on non-fiscal measures in the Economic Freedom of the World index. Here’s a chart comparing Sweden and the United States. But I also included a few other nations for purposes of comparison. You can see Switzerland, the U.S., Sweden, and the United Kingdom all have similar scores for economic freedom if the burden of taxation and government spending is removed from the mix. But things change dramatically when taxes and spending are added to the formula. Switzerland is ranked 4th overall because of a decent fiscal system, ahead of the United States (6th) and United Kingdom (10th). while Sweden falls all the way to 37th place.

Denmark gets very high marks for non-fiscal freedom, so it only drops to 14th in the overall rating because of its bloated welfare state. Hong Kong and Singapore, meanwhile, rank 1st and 2nd in the world because of strong ratings on non-fiscal factors and they also manage to limit the fiscal burden of government.

Last but not least, many of Johnny’s points are included in this Center for Freedom and Prosperity video.

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Hello from the Most Serene Republic of San Marino, a 24-square mile enclave centered around Monte Titano in eastern Italy. I’m here for a conference on “Competition and Alliances among States.”

Like many other so-called tax havens, San Marino has been bludgeoned in recent years by politicians from high-tax nations, who resent the flow of jobs and capital to low-tax jurisdictions. This is creating problems for the economy, which is one of the most prosperous in the world.

I will speak later today about the ongoing battle between those who favor tax competition and those who want tax harmonization. Not surprisingly, my presentation will include some jabs at France, Germany, and other high-tax nations, as well as statist international bureaucracies such as the Organization for Economic Cooperation and Development.

But my main goal will be to put this battle in context, pointing out that the attacks against low-tax jurisdictions will get more intense in the future as welfare states begin to fall apart and politicians desperately search for more revenue to delay the day of reckoning.

This is not to imply that San Marino is a laissez-faire paradise. Yes, comparatively low tax rates have generated prosperity, but prosperity generates a lot of tax revenue (the Laffer Curve strikes again!), and the nation’s politicians have succumbed to temptation and spent all the money. Indeed, there is not much difference between the welfare state in San Marino and the one in Italy.

The moral of the story, of course, is that all nations should strive to shrink the overall burden of government. San Marino should try to be more like Hong Kong and less like France. The same is true for the United States.

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I’m not saying he’s the next Ronald Reagan. Some of his views on global warming/climate change are very troubling. And he’s apparently hopelessly bad on 2nd Amendment rights.

But I’m incredibly impressed at his ability to fight back against spoiled, pampered, over-compensated government bureaucrats. I wish other Republicans could think and talk on their feet like Christie. Watch and enjoy.

Correction - the original youtube video has been removed, but in the comments section, Adrian helpfully draw our attention to this link where you can still Christie in action.

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Very few things that happen in Washington are legitimate functions of the federal government. I’ve already posted about the need to dismantle the Department of Transportation and send it back to the states, but some things  shouldn’t even be handled by state and local governments. Housing is a perfect example. There should be no role for government in building or subsidizing housing, period.

But I’ll be happy if we can simply get rid of the Department of Housing and Urban Development in Washington. This $53 billion turkey should be the top target for GOP reformers.

Fealty to the Constitution should be the only reason lawmakers need to abolish HUD, but if they’re looking for some tangible examples of how the Department squanders money, J.P. Freire of the Washington Examiner opines on the issue, citing some devastating findings in a report from the Center for Public Integrity.

In the more than 3,000 public housing agencies nationwide funded by the Department of Housing and Urban Development, and particularly inside the 172 that HUD considers the most troubled, ABC News and the Center for Public Integrity found a struggle to combat theft, corruption, and mismanagement. According to the report, one official embezzled $900,000 and bought a mansion. Other funds went to support sex workers. In other words, this is a perfect illustration of why recommending cuts to such assistance programs is not heartless but actually wise — waste is rampant:

The problems are widespread, from an executive in New Orleans convicted of embezzling more than $900,000 in housing money around the time he bought a lavish Florida mansion to federal funds wrongly being spent to provide housing for sex offenders or to pay vouchers to residents long since dead. Despite red flags from its own internal watchdog, HUD has continued to plow fresh federal dollars into these troubled agencies, including $218 million in stimulus funds since 2009, the joint investigation found.

These are horrific examples of government waste, and they are tailor-made for soundbites and blog posts, but waste, fraud, and corruption are not the real issues. HUD should be abolished even if every penny of the budget could be accounted for. If Republicans can’t get rid of HUD, voters should get rid of Republicans.

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I strongly doubt any Republicans in Congress would qualify as “birthers,” but this one-liner from Jimmy Kimmel about the response to the State-of-the-Union address is still rather amusing.

The Republican response was actually somewhat gracious. They said it was a pretty good speech for a foreigner.

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Many of the politicians in Washington, including President Obama during his State-of-the-Union address, piously tell us that there is no way to balance the budget without tax increases. Trying to get rid of red ink without higher taxes, they tell us, would require “savage” and “draconian” budget cuts.

I would like to slash the budget and free up resources for private-sector growth, so that sounds good to me. But what’s the truth?

The Congressional Budget Office has just released its 10-year projections for the budget, so I crunched the numbers to determine what it would take to balance the budget without tax hikes. Much to nobody’s surprise, the politicians are not telling the truth.

The chart below shows that revenues are expected to grow (because of factors such as inflation, more population, and economic expansion) by more than 7 percent each year. Balancing the budget is simple so long as politicians increase spending at a slower rate. If they freeze the budget, we almost balance the budget by 2017. If federal spending is capped so it grows 1 percent each year, the budget is balanced in 2019. And if the crowd in Washington can limit spending growth to about 2 percent each year, red ink almost disappears in just 10 years.

These numbers, incidentally, assume that the 2001 and 2003 tax cuts are made permanent (they are now scheduled to expire in two years). They also assume that the AMT is adjusted for inflation, so the chart shows that we can balance the budget without any increase in the tax burden.

I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year.

We also have international evidence showing that spending restraint – not higher taxes – is the key to balancing the budget. New Zealand got rid of a big budget deficit in the 1990s with a five-year spending freeze. Canada also got rid of red ink that decade with a five-year period where spending grew by an average of only 1 percent per year. And Ireland slashed its deficit in the late 1980s by 10 percentage points of GDP with a four-year spending freeze.

No wonder international bureaucracies such as the International Monetary fund and European Central Bank are producing research showing that spending discipline is the right approach.

This video provides all the details.

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Here’s a great snarky comment from Jimmy Kimmel. Jokes like this are funny because we’ve all experienced he misery of waiting in a line at the Post Office or DMV while bureaucrats chat with each other and otherwise goof off.

The U.S. Postal Service announced plans to close an additional 2,000 branches after losing $8.5 billion. Maybe in retrospect, making people wait in line while you slowly finish your bag of fiery hot Cheetos isn’t such a good idea.

Of course, when taxpayers bail out the Postal Service, the joke will be on us, but let’s not think about that right now. Instead, let’s dream that the government-imposed monopoly on mail delivery will end and the private sector takes over. Heck, even the Washington Post has acknowledged this is the right direction.

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I write about the Laffer Curve so often that I’m surprised people don’t run away screaming. But I’ll continue to be a pest because I want people to understand that you can’t just look at changes in tax rates when predicting changes in tax revenue. You also have to consider changes in taxable income.

Simply stated, my goal is for people to recognize that higher tax rates lower incentives to earn and report income and lower tax rates increase incentives to earn and report income. However, I also want people to understand that this doesn’t mean “all tax cuts pay for themselves.” That only happens in very rare cases. Moreover, it would be good if people recognized that there are lots of factors that influence the economy’s performance, and it’s therefore important to be cautious when making claims about the relationships between tax rates, taxable income, and tax revenue.

So we many not be able to precisely measure the impact of the Laffer Curve, we know it’s there and we know it can be very significant. We also know that economic incentives are not constrained by national borders. The Laffer Curve exists even in nations where politicians generally are not sympathetic to good tax policy. France naturally comes to mind, and here are some excerpts from a new report from Pierre Garello. He examines recent changes in tax rates and the tax base, and finds that better tax policy is having a positive impact.

In 2006 a major change was implemented in France regarding the income tax. Not only the top marginal rate was lowered (from 48.09% to 40.00%), but the same treatment was applied to the other rates. Also, the number of brackets was reduced from 7 to 5. As a result, whatever the level of taxable income, the rate applied was lower after the changes took place than before. …the tax base was also enlarged. In particular, while 20% of gross income from salaries was until then automatically deduced to compute the level taxable income, this was no longer the case with income earned in 2006 and after. …Based on data from the French Public Finances General Directorate (DGFiP) we can see that the impact was a minor drop in tax revenues from the 2006 personal income followed by a slightly higher increase in PIT revenues from 2007 earnings. As illustrated by the graph below, the successive cuts in marginal tax rates between 1995 and 2007 have resulted in higher tax revenues.

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I’d much rather be watching the Georgia-Florida basketball game, but my oppressive and exploitative overlords at the Cato Institute are making me come back to DC this evening to “live-blog” the President’s speech tonight.

Several of my colleagues will be joining me in this exercise. If you want to follow our collective (but not collectivist) analysis, click here.

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I’m disappointed, but not surprised, to read in the Washington Post that President Obama has decided against any changes to restrain Social Security spending. He’ll still probably subject us to pious and insincere rhetoric about fighting red ink in tonight’s State-of-the-Union address, but it is very revealing that the President is rejecting even the recommendations of his hand-picked Commission.

More than two months after his deficit commission first laid out a plan for reining in the national debt, President Obama has yet to embrace any of its controversial provisions – and he is unlikely to break that silence Tuesday night. …the president’s decision not to lay out his own vision for reducing the national debt has infuriated balanced-budget advocates, who fear that a bipartisan consensus for action fostered last month by Obama’s commission could wither without presidential leadership. …Liberals…applauded the decision, arguing that Social Security cuts are neither necessary to reduce current deficits nor a wise move politically.

I won’t be surprised, though, if Obama proposes in his budget to increase the Social Security payroll tax burden. That’s an idea he endorsed during the 2008 campaign.

The right approach, by the way, is not just cutting benefits, but rather letting younger workers shift their payroll taxes into personal retirement accounts, as explained in this video that was released earlier this month.

But the President’s reluctance to touch Social Security is only part of the story. The White House actually intends to push for more government spending. Only they won’t phrase it that way. The President will claim the new spending is an “investment.” But Senator Durbin of Illinois committed a gaffe and admitted this is just a repeat of the failed stimulus.

“It’s part of a stimulus. but we’re sensitive to the deficit,” Durbin said on “Fox News Sunday” when asked by host Chris Wallace about the president’s expected plans to call for more spending for infrastructure, education, research in his State of the Union address Tuesday night to a joint session of Congress.

I’m not sure why people are talking about a new, centrist-oriented Obama. Recycling big-government proposals is hardly a sign of fiscal restraint. And ducking-and-running on entitlements hardly seems to indicate a new era of fiscal responsibility.

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I’ve written several times about Hoover and Roosevelt causing/deepening/lengthening the Great Depression with their tax-and-spend, interventionist policies (see here, here, here, here, here, here, and here). But I’ve only once waded into the deeper economic issues. But a new column by Robert Higgs (h/t, Don Boudreaux) has motivated me to give some well-deserved attention to Austrian economic theory.

As you can see in the excerpt below, Higgs succinctly explains that understanding the works of scholars such as Hayek and Mises is necessary if we want people to truly understand why Keynesianism doesn’t work. Higgs also cites two excellent articles (here and here) by my former grad school colleague, Steve Horwitz, for those who want a head start on grasping these issues.

Misunderstanding the Great Depression has caused much mischief in modern macroeconomics and, more important, in government fiscal and monetary policies based on or influenced by this faulty understanding. If we are ever to arrive at a sound understanding of the Depression, we will have to persuade the economics profession to take Austrian economics seriously, as most economists did before the publication of Keynes’s magnum opus in 1936. Keynesianism in particular has proven itself to be a fundamentally flawed mode of analysis, yet one that has survived, evolved, and—like the zombies in the film “Night of the Living Dead”—keeps coming back, no matter how many times anti-Keynesians credit themselves with having dealt it a fatal blow. Monetarist, New Classical, and other recent critiques have themselves been inadequate or indefensible in various ways, as well.

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Regardless of what one thinks about abortion, it is preposterous for the federal government to be subsidizing the procedure. Yet that is what happens thanks to annual subsidies of as much as $363 million for Planned Parenthood.

Defenders of Planned Parenthood sometimes claim that federal money doesn’t actually pay for abortions, but that’s a silly assertion. Money is fungible, so if taxpayers are keeping an office open and lights on, it means they are subsidizing all of an organization’s activities. But that’s not the point. Even if Planned Parenthood didn’t perform abortions, it should not receive any money from taxpayers. Last time I checked, family planning was not listed in Article I, Section VIII, as one of the functions of the federal government.

This is not a “pro-life” or “pro-choice” issue. Indeed, it also would be wrong for the federal government to subsidize groups that counsel against abortion. Or abstinence groups. Or any other organization dealing with reproductive issues. The federal government shouldn’t be involved, period.

Kathryn Jean Lopez of National Review makes all the right points in her column about how this is an issue that should unite social conservatives, fiscal conservatives, Tea Party folks, and libertarians.

It’s a question that we might see play out on Capitol Hill in the coming months as the new majority seeks to make the late pro-life congressman Henry Hyde proud, by defunding Planned Parenthood and prohibiting taxpayer funding of abortion. …“Ending taxpayer funding of abortion and getting Planned Parenthood’s hand out of the pocket of taxpayers are clearly crossover issues,” says Tony Perkins, president of the Family Research Council. “Social conservatives as well as fiscal conservatives can generally agree that the government has no business being in the business of funding or subsidizing abortion.” …Thomas J. Gaitens of Florida…goes out of his way to make clear that “the Tea Party movement has been purposeful in not getting into social issues, as not to dilute the fiscal, constitutional, and liberty focus; we do, however, see many ways we can impact this debate and remain steady with our positions.” …Gaitens absolutely agrees that such a person could naturally sign on to both the “No Taxpayer Funding for Abortion Act” and nixing further grants to Planned Parenthood. Taxpayer funding for abortion — whether direct or through organizations such as Planned Parenthood — serves, he says, as “a prime example of government overreach.” …An excellent question for social conservatives, fiscal conservatives, and plain old voters is the one Chuck Donovan of the Heritage Foundation poses: “Why are U.S. taxpayers borrowing money at a record rate to, in part, provide grants to an organization, Planned Parenthood, which raised $388 million more than it spent from 2002 to 2007?”

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I’ve always rejected coercive redistribution, particularly when imposed by the federal government.

But some types of redistribution are worse than others, and when big business and big government get in bed together, ordinary people are the ones who get screwed.

This is why Obama’s supposed “move to the center” is a bunch of nonsense.

Tim Carney is the go-to guy on this issue, and his column this morning in the Washington Examiner exposes the real meaning of Obama’s recent appointments of a “banker” and a “CEO.”

Let’s start with Bill Daley, the supposed banker who will be Obama’s new Chief of Staff. Does this signal a move to the right, as some left-wingers fear? That might be the case if Obama had appointed a real banker like John Allison of BB&T, who wants government to get out of the way and believes banks should sink or swim without bailouts or subsidies. But, as Tim explains, that is not the attitude of Bill Daley, who is more akin to Jim Taggart, the rent-seeking businessman in Atlas Shrugged.

Check out Daley’s resume. In the 1990s, he ran Amalgamated Bank, owned by a union and described by the Chicago Sun-Times as “one of the city’s most politically connected financial institutions.” Bill’s brother, Mayor Richard Daley, kept the city’s money on deposit at Amalgamated. Later, Bill held a seat on Fannie Mae’s board, pocketing six-figure compensation from the government-sponsored enterprise that used a housing bubble and an implicit government guarantee to fill a slush fund for well-connected Democrats — until taxpayers bailed it out in 2008. This is Obama’s kind of businessman: a banker who leverages his political connections for profit.

Or what about Obama’s appointment of Jeff Immelt of General Electric? Does this mean Obama wants to unleash the power of free enterprise? That would be welcome news, but GE has morphed into a corrupt company that specializes in fleecing taxpayers (a very sad development since GE once sponsored Ronald Reagan). Once again, Tim hits the nail on the head with a devastating indictment.

GE, which marches in sync with government, pocketing subsidies, profiting from regulation, and lobbying for more of both. …Obama bragged GE would be selling to a power plant in Samalkot, India. That sale is no triumph of free trade — Obama’s Export-Import Bank is providing at least $400 million in subsidized financing to grease the skids. Subsidies are GE’s lifeblood, and Immelt’s own words make that clear. In his op-ed announcing his appointment, Immelt called for a “coordinated commitment among business, labor and government…” He also advocated “partnership between business and government…” This is Immelt’s style. …wherever Obama has led, GE has followed. Obama has championed cap and trade in greenhouse gasses, and GE has started a business dedicated to creating and trading greenhouse gas credits. As Obama expanded subsidies on embryonic stem cells, GE opened an embryonic stem-cell business. Obama pushed rail subsidies, and GE hired Linda Daschle — wife of Obama confidant Tom Daschle — as a rail lobbyist. GE, with its windmills, its high-tech batteries, its health care equipment, and its smart meters, was the biggest beneficiary of Obama’s stimulus. To get these gears in sync isn’t cheap: The company has spent $65.7 million on lobbying during the Obama administration — more than any other company by far. So much for Obama’s war on lobbyists.

In other words, appointing Daley and Immelt does not mean a change in policy. These are people who want a bigger government because these are people who have learned to line their pockets when government has more power. They may have different motives than traditional leftists, but the result is the same. As I’ve noted before, my former Cato colleague Will Wilkinson said it best when he wrote that, “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.”

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There’s a supposed expose in the U.K.-based Daily Mail about how major British companies have subsidiaries in low-tax jurisdictions. It even includes this table with the ostensibly shocking numbers.

This is quite akin to the propaganda issued by American statists. Here’s a table from a report issued by a left-wing group that calls itself “Business and Investors Against Tax Haven Abuse.”

At the risk of being impolite, I’ll ask the appropriate rhetorical question: What do these tables mean?

Are the leftists upset that multinational companies exist? If so, there’s really no point in having a discussion.

Are they angry that these firms are legally trying to minimize tax? If so, they must not understand that management has a fiduciary obligation to maximize after-tax returns for shareholders.

Are they implying that these businesses are cheating on their tax returns? If so, they clearly do not understand the difference between tax avoidance and tax evasion.

Are they agitating for governments to impose worldwide taxation so that companies are double-taxed on any income earned (and already subject to tax) in other jurisdictions? If so, they should forthrightly admit this is their goal, notwithstanding the destructive, anti-competitive impact of such a policy.

Or, perhaps, could it be the case that leftists on both sides of the Atlantic don’t like tax competition? But rather than openly argue for tax harmonization and other policies that would lead to higher taxes and a loss of fiscal sovereignty, they think they will have more luck expanding the power of government by employing demagoguery against the big, bad, multinational companies and small, low-tax jurisdictions.

To give these statists credit, they are being smart. Tax competition almost certainly is the biggest impediment that now exists to restrain big government. Greedy politicians understand that high taxes may simply lead the geese with the golden eggs to fly across the border. Indeed, competition between governments is surely the main reason that tax rates have dropped so dramatically in the past 30 years. This video explains.

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I was surprised to receive a joke about unemployment insurance, but the resourceful readers of this blog have surprised me yet again with a joke about disability insurance.

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“An Irishman with a bad leg hobbled into a restaurant one afternoon. He painfully sat down at a booth and asked the waitress for a cup of
coffee. The Irishman looked across the restaurant and asked, “Is that Jesus over there?” The waitress nodded so the Irishman told her to give Jesus a cup of coffee too.

The next patron to come in was an Englishman with a hunched back. He shuffled over to a booth and asked the waitress for a glass of hot tea. He also glanced across the restaurant and asked “Is that Jesus over there?” The waitress nodded so the Englishman said to give Jesus a cup of hot tea too.

The third patron to come into the restaurant was a Hillbilly from Eastern Kentucky. He swaggered over to a booth, sat down and hollered “Hey there sweet thing, hows about getting me a cold glass of Coke!”. He too looked across the restaurant and asked “Is that God’s boy over there?” The waitress nodded so the Hillbilly said to give Jesus a cold glass of Coke too.

As Jesus got up to leave He passed by the Irishman and touched him and said “For your kindness, you are healed.” The Irishman felt the strength come back into his leg and got up and danced a jig out the door.

Jesus also passed by the Englishman, touched him and said, “For your kindness, you are healed.” The English man felt his back straightening up and he raised up his hands, praised the Lord and did a series of back flips out the door.

Then Jesus walked towards the Hillbilly. The Hillbilly jumps up and yells, “Hey man don’t touch me …… I’m drawing disability!”

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It may not be very nice to say “I told you so” when the warnings you issue become reality, but I’m not a nice person (at least when it comes to greedy politicians imposing stupid policy).

So I’ll openly admit that I’m happy to read that entrepreneurs and job creators already are beginning to escape the kleptocrat politicians in Illinois. Here are a few highlights of an article in the News-Gazette.

The founder of Jimmy John’s said he has applied for Florida residency and may recommend that his corporate headquarters move out-of-state as a result of the Illinois tax increases enacted last week. Jimmy John Liautaud told The News-Gazette on Tuesday that he is angry about the moves, which boosted the individual income tax from 3 percent to 5 percent and the corporate income tax from 7.3 percent to 9.5 percent. “All they do is stick it to us,” he said, adding that the Legislature and governor showed “a clear lack of understanding.” …Jimmy John’s, which has its corporate headquarters on Fox Drive in Champaign, has more than 1,000 sandwich shops nationwide, many of them franchise operations. Champaign has been its corporate base, but Liautaud said it will not necessarily continue that way. …Once he collects information on alternative sites, he will present it to the company’s board of directors and ask the board to decide. As for himself, “my family and I are out of here,” he said. …Jimmy John’s employs 100 at the corporate office in Champaign and has 190 other employees who work elsewhere but come to Champaign every four weeks, Liautaud said. …He said he’s sick of being “pummeled.” “I’m not sophisticated enough, smart enough or politically correct enough to absorb it all,” he said. Jimmy John’s offices occupy 23,000 square feet on Fox Drive, and Liautaud said he had considered buying a 20,000-square-foot building just north of those offices. Those plans went out the window with the tax increase, he said. …James North, president of Jimmy John’s, echoed many of the same sentiments. “I absolutely love it here,” North said. “But when you do the math, it doesn’t add up. Florida looks pretty nice right now.”

It goes without saying, of course, that Illinois is not the only short-sighted state. New York politicians also have a fetish for driving taxpayers to other states.

A special welcome to Instapundit and NRO readers, and an addendum. This example of people and businesses escaping bad policy by crossing borders is more than just a cheerful anecdote. It is part of a process known as tax competition, which  is a powerful force for better policy between both states and nations.

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I don’t think I’ve ever promoted a book since starting this blog, but the new autobiography from Walter Williams is too good not to recommend. But don’t believe me. Walter was just interviewed by the Wall Street Journal, and you can get a flavor for his blunt style and crisp analysis. Speaking for myself, I’m going to steal his line about how “Politicians exploit economic illiteracy.” Read the entire WSJ column here, but mostly get his book and read that.

Even in the antebellum era, when slaves often weren’t permitted to wed, most black children lived with a biological mother and father. During Reconstruction and up until the 1940s, 75% to 85% of black children lived in two-parent families. Today, more than 70% of black children are born to single women. “The welfare state has done to black Americans what slavery couldn’t do, what Jim Crow couldn’t do, what the harshest racism couldn’t do,” Mr. Williams says. “And that is to destroy the black family.” …Walter Williams was a libertarian before it was cool. And like other prominent right-of-center blacks—Clarence Thomas, Thomas Sowell, Shelby Steele—his intellectual odyssey began on the political left. …”I thought some laws, like minimum-wage laws, helped poor people and poor black people and protected workers from exploitation. I thought they were a good thing until I was pressed by professors to look at the evidence.” …He earned his doctorate in 1972 from UCLA, which had one of the top economics departments in the country, and he says he “probably became a libertarian through exposure to tough-mined professors”—James Buchanan, Armen Alchian, Milton Friedman—”who encouraged me to think with my brain instead of my heart. I learned that you have to evaluate the effects of public policy as opposed to intentions.” …in 1982 he published his first book, “The State Against Blacks,” arguing that laws regulating economic activity are far larger impediments to black progress than racial bigotry and discrimination. Nearly 30 years later, he stands by that premise. …Mr. Williams’s writings have sought to highlight “the moral superiority of individual liberty and free markets,” as he puts it. “I try to write so that economics is understandable to the ordinary person without an economics background.” His motivation? “I think it’s important for people to understand the ideas of scarcity and decision-making in everyday life so that they won’t be ripped off by politicians,” he says. “Politicians exploit economic illiteracy.” …he says. “When I fill in for Rush, I get emails from blacks who say they agree with what I’m saying. And there are a lot of white people questioning ideas on race, too. There’s less white guilt out there. It’s progress.”

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Who knew there was such a thing as an unemployment insurance joke? This gem comes courtesy of the Washington Watch website.

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A guy walked into the local unemployment office to pick up his check. 

He marched straight up to the counter and said, “Hi. You know, I just HATE drawing unemployment. I’d really rather have a job.”

The worker behind the counter said, “Your timing is excellent. We just got a job opening from a very wealthy old man who wants a chauffeur and bodyguard for his beautiful daughter. You’ll have to drive around in his new Mercedes-Benz CL, and he will supply all of your clothes. Because of the long hours, meals will be provided. You’ll also be expected to escort the daughter on her overseas holiday trips. This is rather awkward to say, but you will also have, as part of your job, to satisfy her sexual urges as the daughter is in her mid-20′s and has a rather strong sex drive.”

The guy, just plain wide-eyed, said, “You’re bullshittin’ me!”

The worker said, “Yeah, well .. You started it.”

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I’m not a big fan of central banks, and I definitely don’t like multilateral bureaucracies, so I almost feel guilty about publicizing two recent studies published by the European Central Bank. But when such an institution puts out research that unambiguously makes the case for smaller government, it’s time to sit up and take notice. And since these studies largely echo the findings of recent research by the International Monetary Fund, we may have reached a point where even the establishment finally understands that government is too big.

The first study looks at real-world examples of debt reduction in 15 European nations and investigates the fiscal policies that worked and didn’t work. Entitled, “Major Public Debt Reductions: Lessons From The Past, Lessons For The Future,” the report unambiguously concludes that spending restraint is the right way to reduce deficits and debt. Tax increases, by contrast, are not successful. The study doesn’t highlight this result, but the data clearly show that, “revenue increases do not seem to have induced debt reductions, whereas cuts in primary expenditure seem to have contributed significantly in the case of major debt reductions.” Here’s a key excerpt.

…this paper estimates several specifications of a logistic probability model to assess which factors determine the probability of a major debt reduction in the EU-15 during the period 1985-2009. Our results are three-fold. First, major debt reductions are mainly driven by decisive and lasting (rather than timid and short-lived) fiscal consolidation efforts focused on reducing government expenditure, in particular, cuts in social benefits and public wages. Revenue-based consolidations seem to have a tendency to be less successful. Second, robust real GDP growth also increases the likelihood of a major debt reduction because it helps countries to “grow their way out” of indebtedness. Here, the literature also points to a positive feedback effect with decisive expenditure-based fiscal consolidation because this type of consolidation appears to foster growth, in particular in times of severe fiscal imbalances.

The last part of this passage is especially worth highlighting. The authors found that reducing spending promotes faster economic growth. In other words, Obama did exactly the wrong thing with his so-called stimulus. The U.S. economy would have enjoyed much better performance if the burden of spending had been reduced rather than increased. One can only hope the statists at the Congressional Budget Office learn from this research.

Equally interesting, the report notes that reducing social welfare spending and reducing the burden of the bureaucracy are the two most effective ways of lowering red ink.

The estimation results indicate that expenditure-based consolidation which mainly concentrates on cuts in social benefits and government wages is more likely to lead to a major debt reduction. A significant decline in social benefits or public wages vis-a-vis the overall decline in the primary expenditure will increase the probability of a major debt reduction by 31 and 26 percent, respectively.

The other study takes a different approach, looking at the poor fiscal position of European nations and showing what would have happened if governments had imposed some sort of cap on government spending. Entitled, “Towards Expenditure Rules And Fiscal Sanity In The Euro Area,” this report finds that restraining spending (what the study refers to as a “neutral expenditure policy”) would have generated much better results.  Here are the main findings.

…the study assesses the impact of the fiscal stance on primary expenditure ratios and public debt ratios and, thus, provides a measure of prudence or imprudence of past expenditure policies. The study finds that on the basis of real time rules, expenditure and debt ratios in 2009 for the euro area aggregate would not have been much different with neutral expenditure policies than actually experienced. …Primary expenditure ratios would have been 2-3½ pp of GDP lower for the euro area aggregate, 3-5pp of GDP for the euro area without Germany and up to over 10 pp of GDP lower in certain countries if expenditure policies had been neutral.

There’s a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by as much as 10 percentage points of GDP. To put that figure in context, reducing the burden of government spending by that much in America would balance the budget overnight.

There are several ways of achieving such a goal. The report suggests a rule based on the growth of the overall economy, which is similar to a proposal being developed in the United States by Senator Corker of Tennessee. But it also could mean something akin to the old Gramm-Rudman-Hollings law, but intelligently revised to focus on annual spending rather than annual deficits. Some sort of limit on annual spending, perhaps based on population plus inflation like the old Taxpayer Bill of Rights (TABOR) in Colorado, also could be successful.

There are a couple of ways of skinning this cat. What’s important is that there needs to be a formula that limits how much spending can grow, and this formula should be designed so that the private sector grows faster than the public sector. And to make sure the formula is successful, it should be enforced by automatic spending cuts, similar to the old Gramm-Rudman-Hollings sequester provision.

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These two are worth sharing, especially the one about Schwarzenegger.

  • The Republican-controlled House voted to repeal the healthcare bill. If that goes well, they’ll see what they can do about this whole “women voting” thing.
  • Arnold Schwarzenegger says he’s considering doing a movie in which he would play a Nazi. He says that after being governor of California, he’s looking for a job that will make people hate him less.

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On this day in 1981, a truly great man became President of the United States. To celebrate, here are a few videos.

This was Reagan’s coming-out political moment, his speech on behalf of Goldwater in 1964, which includes the great line about the “soup kitchen of the welfare state.”

And here’s a clip from his inauguration, where he says something that most Republicans forgot.

Here’s his famous “tear down this wall” speech in Germany.

Here’s a heartwarming video about Reagan’s use of humor.

And, speaking of humor, here are his famous lines from his 1980 debate with Carter and his 1984 debate with Mondale.

Let’s close with Reagan’s incredibly moving D-Day speech about the “boys of Pointe du Hoc.”

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The President garnered some attention for his January 18 column in the Wall Street Journal, in which he said we need to control the regulatory burden.

Let’s start with the insincere part. He praised capitalism.

America’s free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.

I’m not really sure how to analyze this passage. Let’s just say it is akin to George W. Bush talking about the need for small government and fiscal responsibility.

Obama then talks about the need for balance, saying that regulations sometimes are too onerous, but then he gets to the inaccurate part.

…we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

I don’t know whether to laugh or cry at this statement. A part of the government, the Federal Reserve, creates far too much liquidity with an easy-money policy. Other government-created entities, Fannie Mae and Freddie Mac, then create enormous subsidies for bad housing loans. These combined policies lead to a bubble that bursts, and Obama wants us to believe it was a problem of inadequate regulation?!? For those who are interested, here’s a good article from the American Enterprise Institute explaining how government caused the financial crisis.

Now let’s get to the hypocritical part, where the President issues a new executive order, asserting we need to balance costs and benefits.

As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices.

I suppose we should give the President credit for chutzpah. Less than one month ago, his Administration proposes an IRS interest-reporting regulation that, in a best-case scenario, will drive tens of billions of dollars out of the U.S. economy. That regulation does not even pretend there are any offsetting benefits, yet Obama says his Administration will be diligent in applying cost-benefit analysis. This is sort of like a kid murdering his parents and then asking a court for mercy because he’s an orphan.

But that example is just the tip of the iceberg. Diana Furchtgott-Roth has a column for Realclearmarkets, where she dings the President for absurd regulations dealing with everything from gender quotes in the Dodd-Fran bailout bill to offshore drilling regulations that have thrown tens of thousands into unemployment lines.

And David Harsanyi, writing in the Denver Post, nails the White House for several examples of regulatory excess, including the EPA’s power grab, the FCC’s unilateral attempt to regulate the Internet, and the nightmarish rules that will be required for government-run healthcare.

Right now the EPA is drafting carbon rules to force on states, even though a similarly torturous 2,000 pages on a cap-and-trade scheme intending to make power more expensive was rejected. Maybe there’s something in that pile of paper to mine? Right now, the FCC is shoving net neutrality in the pipeline — again, bypassing Congress — so government can regulate the Internet for the first time in history, though the commissioners themselves admit that, as of now, any need for rules are based on the what-ifs of their imaginations. There exists no legislation more burdensome and expensive than the “job-crushing” (not “job-killing,” because, naturally, we can’t stand for that kind of imagery) “Patient Protection and Affordable Health Care Act,” formerly known as Obamacare and presently being symbolically repealed by House Republicans.

Obama’s insincerity, inaccuracy, and hypocrisy are unfortunate. The burden of regulation is now estimated to be about $1.75 trillion. Counterproductive red tape is hidden form of taxation that impedes the economy’s performance, and that means less prosperity for America.

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I don’t know if this is a real letter-to-the-editor or if Major Caudill really exists, but this is a very strong statement in favor of the civilizing impact of firearms. And since I like to share good things that arrive in my inbox, it’s now yours to share.

I recall hearing saying that went something like this: “God made men, but Sam Colt made them equal.” I probably butchered that quote, but it captures the essence of this letter.

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Letter to the Editor by Maj. L. Caudill USMC (Ret)

Human beings only have two ways to deal with one another: reason and force. If you want me to do something for you, you have a choice of either convincing me via argument or forcing me to do your bidding under threat of force.  Every human interaction falls into one of those two categories, without exception. Reason or force, that’s it.

In a truly moral and civilized society, people exclusively interact through persuasion. Force has no place as a valid method of social interaction, and the only thing that removes force from the menu is the personal firearm, as paradoxical as it may sound to some.

When I carry a gun, you cannot deal with me by force. You have to use reason and try to persuade me, because I have a way to negate your threat or employment of force.

The gun is the only personal weapon that puts a 100-pound woman on equal footing with a 220-pound mugger, a 75-year-old retiree on equal footing with a 19-year-old gang banger, and a single guy on equal footing with a carload of drunk guys with baseball bats. The gun removes the disparity in physical strength, size, or numbers between a potential attacker and a defender.

There are plenty of people who consider the gun as the source of bad force equations.

These are the people who think that we’d be more civilized if all guns were removed from society, because a firearm makes it easier for a [armed] mugger to do his job. That, of course, is only true if the mugger’s potential victims are mostly disarmed either by choice or by legislative fiat—it has no validity when most of a mugger’s potential marks are armed.

People who argue for the banning of arms ask for automatic rule by the young, the strong, and the many; and that’s the exact opposite of a civilized society. A mugger, even an armed one, can only make a successful living in a society where the state has granted him a force monopoly.

Then there’s the argument that the gun makes confrontations lethal that otherwise would only result in injury. This argument is fallacious in several ways. Without guns involved, confrontations are won by the physically superior party inflicting overwhelming injury on the loser.

People who think that fists, bats, sticks, or stones don’t constitute lethal force watch too much TV, where people take beatings and come out of it with a bloody lip at worst. The fact that the gun makes lethal force easier works solely in favor of the weaker defender, not the stronger attacker. If both are armed, the field is level.

The gun is the only weapon that’s as lethal in the hands of an octogenarian as it is in the hands of a weight lifter. It simply wouldn’t work as well as a force equalizer if it wasn’t both lethal and easily employable.

When I carry a gun, I don’t do so because I am looking for a fight, but because I’m looking to be left alone. The gun at my side means that I cannot be forced, only persuaded. I don’t carry it because I’m afraid, but because it enables me to be unafraid. It doesn’t limit the actions of those who would interact with me through reason, only the actions of those who would do so by force. It removes force from the equation… and that’s why carrying a gun is a civilized act.

By Maj. L. Caudill USMC  (Ret.)

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A former  Cato colleague, Will Wilkinson, made one of the most astute and powerful observations I have ever read when he wrote that, “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.”I thought about this statement when I read a column today by muckraking journalist Tim Carney, who discusses how former Republican Senator Bill Frist is advising his fellow GOPers to surrender and give up the fight against Obamacare. But, as Tim warns, Frist is not an impartial observer. He is getting rich (or richer, to be more accurate) by helping special interests line their pockets by taking advantage of the government’s added power over the health care sector.

If you’re a Republican, and you don’t want the media to pry into your financial conflicts of interest, there used to be a simple method: support Democratic big-government policies. The latest Republican to try this rule is Bill Frist. …as I wrote in my column last year:

Frist is a partner in a private investment firm that bets on health care companies — and on regulation…. So Frist gets rich by helping pick the health care companies that will get rich. Now he’s backing Obamacare — and winning praise for it.

Look at some of the language on Cressey & Co’s webpage. “The Cressey & Company strategy applies unique insights and experience to produce extraordinary results” [emphasis added]. What “unique insights” do you think Frist provides? Another page on the site gives us a hint: “With deep expertise in the healthcare reimbursement and regulatory environments, the Cressey & Company team has invested in almost every for-profit niche of healthcare.” Stein noted Frist’s conflicts of interest, but don’t expect the rest of the media to be as thorough — after all, last year, Frist got a free pass as did health-care lobbyist Bob Dole. Sharing the stage with Frist was Tom Daschle, a K Street consultant for many health-care companies. The venue: The Bipartisan Policy Center. That’s a clue — if you hear the word “bipartisan,” there’s a good chance everyone on the marquee is getting paid.

Tim’s work on these issues is first rate, and you should follow what he writes – but only if you have a strong stomach and low blood pressure. Why? Because if you follow his work, you will understand that the worst forms of redistribution in Washington are the ones that 1) take place behind closed doors, and 2) transfer money from ordinary people to the rich and powerful.

This is the essential point of my video linking big government to corruption, though I wasn’t as succinctly eloquent of Will Wilkinson or as exhaustively detailed as Tim Carney.

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Here’s another amusing email that landed in my inbox. Sort of the same theme as our joke about Canada.

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Dear American liberals, leftists, statists, social progressives, socialists, Marxists and Obama supporters, etc:

We have stuck together since the late 1950′s for the sake of the kids, but this latest election has made me realize that we should get a divorce. I know we tolerated each other for many years for the sake of future generations, but sadly, this relationship has clearly run its course.

Our two ideological sides of America cannot and will not ever agree on what is right for us all, so let’s just end it on friendly terms. We can smile and chalk it up to irreconcilable differences and go our own way.

Here is a model separation agreement:

–Our two groups can equitably divide up the country by landmass each taking an appropriate portion. We’re happy to give you New England and the West Coast. The good people of New Hampshire obviously will need some time to pack up and move to flyover country, and we’ll give the tenured professors in university towns ample time to relocate in your share of the country.

–We don’t like redistributive taxes and the IRS, so you can keep them.

–You are welcome to the left-wing judges and the ACLU.

–Since you hate guns and war, we’ll take our firearms, the cops, the NRA and the military.

–We’ll take the nasty, smelly oil industry and you can go with wind, solar and biodiesel.

–You can keep Oprah, Michael Moore and Rosie O’Donnell. You are, however,  responsible for finding a bio-diesel vehicle big enough to move all three of them.

–We’ll keep capitalism, greedy corporations, pharmaceutical companies, Wal-Mart and Wall Street.

–You can have your beloved welfare grubbers, food stamp recipients, homeless, hippies, druggies, and illegal aliens.

–We’ll keep the hot Alaskan hockey moms, greedy CEO’s, and rednecks.

–We’ll keep the Bibles and give you the networks and Hollywood.

–You can make nice with Iran and Palestine and we’ll retain the right to invade and hammer places that threaten us.

–You can have the peaceniks and war protesters. When our allies or our way of life are under assault, we’ll help provide them security.

–We’ll keep our Judeo-Christian values.

–You are welcome to Islam, Scientology, Humanism, political correctness and Shirley McClaine. You can also have the U.N. but we will no longer be paying the bill.

–We’ll keep the SUV’s, pickup trucks, and full-sized luxury cars. You can take every Subaru, Volvo, and Prius you can find.

–You can give everyone healthcare if you can find any practicing doctors.

–We’ll continue to believe healthcare is a product of the marketplace and not a right.

–We’ll keep “The Battle Hymn of the Republic” and “The National Anthem.”

–I’m sure you’ll be happy to substitute “Imagine”, “I’d Like to Teach the World to Sing”, “Kum Ba Ya” or “We Are the World”.

–We’ll practice trickle down economics and you can continue to give trickle up poverty your best shot.

–Since it often so offends you, we’ll keep our history, our name and our flag.

Would you agree to this?   If so, please pass it along to other like-minded liberals. In the spirit of friendly parting, I’ll bet you $10 (our new gold-backed dollar, not your QE15 dollar) which one of us will need help in 15 years.

Sincerely,

American libertarians, conservatives, traditionalists, constitutionalists, etc

P.S. Also, please take Ted Turner, Sean Penn, Martin Sheen, Barbara Streisand, &; Jane Fonda with you.

P.P.S.  And you won’t have to press 1 for English when you call our country.

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