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Archive for November, 2009

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

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

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

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

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

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

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

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

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

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

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

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

President Obama has shattered the budget record for first-year presidents — spending nearly double what his predecessor did when he came into office and far exceeding the first-year tabs for any other U.S. president in history. In fiscal 2009 the federal government spent $3.52 trillion …That fiscal year covered the last three-and-a-half months of George W. Bush’s term and the first eight-and-a-half months of Obama’s.

This story was featured on the Drudge Report, so it has received a lot of attention. I’m a big fan of criticizing Obama’s profligacy, but I don’t think it is right to blame him for Bush’s mistakes. At the risk of repeating my earlier post, the 2009 fiscal year began on October 1, 2008, and the vast majority of the spending for that year was the result of Bush Administration policies. Yes, Obama did add to the waste with the so-called stimulus, the omnibus appropriation, the CHIP bill, and the cash-for-clunkers nonsense, but as the chart illustrates, these boondoggles only amounted to just a tiny percentage of the FY2009 total – about $140 billion out of a $3.5 trillion budget (supplemental defense spending could boost Obama’s share by another $25 billion, but Bush surely would have asked for at least that much extra spending, so individual readers can adjust the number if they wish).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I’m sure I have plenty of flaws, but being squishy on the issue of the size of government surely is not on the list.

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

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

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

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

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Tim “Turbotax” Geithner is getting attacked on the Hill because of the weak economy, but he should be condemned for the corruption and favoritism he displayed while head of the New York Fed during the financial crisis. The New York Times recently reported how much of the money wasted on AIG actually was designed to go in the pockets of Geithner’s friends and cronies in the banking sector:

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

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After several posts about crazy decisions by the U.K. government, mostly involving extreme political correctness, it’s time to get back to basics and look at tax policy. A financial services consulting firm in London has just released a survey with the stunning finding that one-fifth of entrepreneurs are thinking of escaping the county because of punitive taxes – particularly the new top tax rate of 50 percent. Here’s what Tax-news.com reported:

The results of a new survey suggest that one-fifth of UK-based entrepreneurs earning more than GBP150,000 are planning to flee Britain in search of countries with more favorable tax rates. The poll of more than 300 entrepreneurs by business advisors Tenon also found that many more may follow in an attempt to escape the 50% rate of income tax, due to be introduced from next April on annual incomes above GBP150,000, with nearly half of the respondents (48%) still deciding what action to take. …Tenon points out that in the last month, high profile names such as the actor Sir Michael Caine and the artist Tracey Emin have threatened to change their tax residency to countries with more favorable tax rates. Popular locations for redomiciling include Monte Carlo, Guernsey, Liechtenstein, and the Cayman Islands. Andy Raynor, Chief Executive of Tenon Group, noted that entrepreneurs are showing their disapproval of the tax measures by “letting their feet do the talking.”

The Mayor of London, meanwhile, is much less restrained regarding the foolishness of Gordon Brown’s class-warfare policy. Here’s what he has to say in the Daily Telegraph:

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

Last but not least, here’s the Center for Freedom and Prosperity’s video, which explains why punitive soak-the-rich tax increases are fundamentally misguided.

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

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

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

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

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

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

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

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

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

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

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

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I  really do like the English. I enjoy London, and have been threre enough to know my way around the “tube.” I’ve spoken at conference in Oxford and Cambridge. I have dated English women. So I am not going out of my way to pick on England. But I despise stupid and/or oppressive government policies, and a bunch of jaw-dropping stories involving England have come to my attention recently, mostly thanks to conventional websites such as the Drudge Report. The latest example is from The Corner at Nationalreview.com, and features a former soldier who got arrested and convicted (and may even go to jail for five years) because he found a gun in his yard and he turned it over to the police. I presume this is in part a reflection of the anti-gun ideology of the UK government, but are prosecutors and judges given no leeway to avoid foolish prosecutions or protect innocent people from absurd charges? Here is the news report:

A former soldier who handed a discarded shotgun in to police faces at least five years imprisonment for “doing his duty”. Paul Clarke, 27, was found guilty of possessing a firearm at Guildford Crown Court on Tuesday – after finding the gun and handing it personally to police officers on March 20 this year. The jury took 20 minutes to make its conviction, and Mr Clarke now faces a minimum of five year’s imprisonment for handing in the weapon. In a statement read out in court, Mr Clarke said: “I didn’t think for one moment I would be arrested. …The court heard how Mr Clarke was on the balcony of his home in Nailsworth Crescent, Merstham, when he spotted a black bin liner at the bottom of his garden. In his statement, he said: “I took it indoors and inside found a shorn-off shotgun and two cartridges. “I didn’t know what to do, so the next morning I rang the Chief Superintendent, Adrian Harper, and asked if I could pop in and see him. “At the police station, I took the gun out of the bag and placed it on the table so it was pointing towards the wall.” Mr Clarke was then arrested immediately for possession of a firearm at Reigate police station, and taken to the cells. …Prosecuting, Brian Stalk, explained to the jury that possession of a firearm was a “strict liability” charge – therefore Mr Clarke’s allegedly honest intent was irrelevant. Just by having the gun in his possession he was guilty of the charge, and has no defence in law against it, he added. …Judge Christopher Critchlow said: “This is an unusual case, but in law there is no dispute that Mr Clarke has no defence to this charge. “The intention of anybody possessing a firearm is irrelevant.”

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

To paraphrase Clinton Treasury Secretary Lloyd Bentsen, George Bush is no Ronald Reagan. …on Bush’s watch, and with his signature, the burden of federal spending rose to 20.3 percent of GDP in 2006, up from just 18.5 percent when he took office. During the Clinton years, by contrast, federal spending fell as a share of GDP, from 21.4 percent in 1993 to 18.5 percent in 2001. …even when defense spending is excluded, Clinton reduced the burden of government, while Bush has expanded it. …According to the Congressional Budget Office, entitlement spending has increased from 10.9 percent of GDP when Bush took office to 11.9 percent of GDP in 2006. During the Clinton years, spending on so-called mandatory programs fell from 11.2 percent of GDP to 10.9 percent of GDP. The domestic discretionary spending numbers tell a similar story: During the Clinton years, these programs dropped from 3.4 percent of GDP to 3.2 percent. Since Bush took office, they have risen to 3.5 percent. …Take trade, for example. At best, Bush has a mixed record. The Central American Free Trade Agreement is a step in the right direction, but his steel tariffs and agricultural subsidies are examples of anti-trade initiatives. Clinton policy was unambiguously pro-trade, however, largely because of the approval and implementation of the North American Free Trade Agreement and the General Agreement on Tariffs and Trade that also launched the World Trade Organization. Clinton gets a better grade on regulatory policy, as well. Bush signed into law the prohibitively expensive Sarbanes-Oxley law, as well as a market-distorting energy bill. The Clinton years, by contrast, saw the burden of regulation reduced on numerous sectors of the economy, including agriculture, financial services and telecommunications. Clinton also beats Bush on federalism. He signed a welfare reform legislation that ended an entitlement program and reduced the central government’s power and authority. On education, Bush went the other direction. His No Child Left Behind Act increased federal control over an area that properly belongs under the purview of state and local governments.

If people want to call me an anti-government ideologue, I don’t think that’s completely accurate, but it’s a fair observation. If people want to call me an unrealistic libertarian dreamer, I plead guilty. But please don’t denigrate me by saying I’m a Republican.

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We just posted about a crazy idea from England to give each person a carbon allowance. A few months ago, we posted about the government in the U.K. interfering with two mothers who take turns babysitting each other’s children. Now we have a story from the Times about bureaucrats wanting to barge into people’s homes and maintain databases to see whether they are being government-approved parents. This brings nanny-state fascism to a new low:

Health and safety inspectors are to be given unprecedented access to family homes to ensure that parents are protecting their children from household accidents. New guidance drawn up at the request of the Department of Health urges councils and other public sector bodies to “collect data” on properties where children are thought to be at “greatest risk of unintentional injury”. …The draft guidance by a committee at the National Institute for Health and Clinical Excellence (Nice) has been criticised as intrusive and further evidence of the “creeping nanny state”. …Nice also recommends the creation of a new government database to allow GPs, midwives and other officials who visit homes to log health and safety concerns they spot. …Matthew Elliott, of the TaxPayers’ Alliance, said: “It is a huge intervention into family life which will be counter-productive. “Good parents will feel the intrusion of the state in their homes and bad parents will now have someone else to blame if they don’t bring up their children in a sensible, safe environment.”

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

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

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