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Archive for the ‘Politics’ Category

I can understand why immigration reform is so contentious since it touches on all sorts of hot-button issues, such as jobs, politics, national identity, and the welfare state.

But I don’t understand why there’s a controversy just because Governor Walker of Wisconsin supports a specific part of the immigration system that provides easier access for foreigners who are willing to invest money and create jobs in America.

Seems like a win-win situation, but check out these excerpts from a report in the Milwaukee Journal Sentinel.

We’ll start with a description of the program.

Congress created the EB-5 program in 1990… Under the Citizenship and Immigration Services’ Immigrant Investor Program, foreigners can obtain these visas by investing $500,000 in high unemployment areas — or $1 million elsewhere — in projects generating or saving 10 jobs over two years. According to The New York Times, the federal government puts the green card applications from these foreign investors on the fast track. In general, it takes about two years to obtain legal residency through the program; other visa programs take much longer.

Not let’s get to the controversy over Governor Walker’s support.

…there’s one federal visa program you won’t hear him attack. It’s the controversial and deeply troubled immigrant investor program. The program — known as EB-5 — puts wealthy foreigners on the path to U.S. citizenship if they invest at least $500,000 in an American commercial project that will create or preserve 10 jobs. Critics have called the abuse-riddled program a “scam” that essentially sells green cards to the affluent and their families, with more than 80% of those in the program coming from China. …David North, a fellow with the conservative Center for Immigration Studies, said…the program is flawed in its premise. “I think it’s immoral, fattening and otherwise unattractive to sell visas, which is what we’re doing now,” North said.

By thew way, there are reasons to be unhappy about the EB-5 program, at least in the way it operates.

I’ve already shared examples of how political insiders are manipulating the program for cronyist purposes.

But today let’s look at the concept of whether it’s good to have an “economic citizenship” program.

And we’ll start the very relevant point that any immigration system is going to be arbitrary.

  • A lottery system is arbitrary because you get to come to America because of luck.
  • A family-reunification system is arbitrary because you get to come to America because of your genes.
  • A system based on refugee status is arbitrary because you get to come to America based on geopolitical circumstances.
  • Even an “open borders” system is arbitrary because you don’t get to come to America if you’re a terrorist, criminal, have communicable diseases, etc.

So if a system is going to be based on arbitrary factors, what’s wrong with deciding that one of the criteria is economic benefit to the United States?

Indeed, maybe I’m too myopic because of my background and training, but it seems like economic benefit should be a factor that everyone can support. After all, these won’t be people seeking handouts from the welfare system.

Consider these passages from a recent New York Times story about all the EB-5 money that’s boosting the Empire State’s economy.

Through a federal visa program known as EB-5, foreigners, more than 80 percent of them from China, are investing billions of dollars in hotels, condominiums, office towers and public/private works in the hope it will result in green cards. Twelve-hundred foreigners have poured $600 million into projects at Hudson Yards; 1,154 have invested $577 million in Pacific Park Brooklyn, the development formerly known as Atlantic Yards; and 500 have put $250 million into the Four Seasons hotel and condominium in the financial district. The list of projects involving EB-5 investments also includes the International Gem Tower on West 47th Street and the New York Wheel on Staten Island. …In the last four years, the program’s popularity has surged. In fiscal year 2010, 1,885 visas were issued. But by fiscal year 2013 that figure jumped 354 percent to 8,564, according to government data. Last year, the entire annual allotment of 10,000 visas had been claimed by August — before the end of the fiscal year in October. This year the quota was reached even earlier, on May 1.

As an aside, this program isn’t attractive to those with lots of money because of America’s punitive tax system.

“This program is not for the very rich in China, because the superwealthy do not want to pay U.S. taxes.” Instead, he said, the wealthiest Chinese prefer to have their legal residences in low tax jurisdictions like Hong Kong or Singapore, and then take advantage of 10-year tourist visas to the United States.

While I’m tempted to now explain why we should fix our bad tax system, let’s stick to the topic of immigration and delve further into the issue of whether it’s good to attract economically successful foreigners to America.

Some scholars say the answer is yes, but they think the EB-5 program is inefficient.

Here’s some of what Professor Eric Posner of the University of Chicago Law School wrote for Slate.

The program is a mess. …it’s almost impossible to figure out whether a specific investment generates jobs rather than reshuffles them from one place to another. There have also been examples of outright fraud and political cronyism. Part of the problem is a lack of documentation but the real problem is that the program is misconceived. …the price we charge for citizenship is extraordinarily low. …A shrewd investor will find an investment that pays a couple percentage points below the market rate. If he invests $500,000 in order to obtain, say, a 6 percent return rather than an 8 percent return, then the true price he pays for U.S. citizenship is $10,000 in foregone return.

So what’s the alternative?

Gary Becker, the late University of Chicago economist and Nobel laureate, once proposed that the United States should sell citizenship to foreigners for a flat fee. The EB-5 program approximates Becker’s proposal, albeit in the most inefficient way possible. Becker argued that citizenship is a scarce good just like tomatoes and hula hoops, and is thus subject to the law of supply and demand. America owns visas and should sell them to willing buyers at the market-clearing price. We would attract immigrants who are skilled enough to earn wages that would cover the fee, and we would gain again from the tax on their wages once they began work in this country. These types of immigrants—the ones who could afford the fee—would be least likely to burden the public fisc by needing welfare payments.

The Becker plan, which Posner basically supports, certainly would be simpler than the EB-5 program.

And it presumably eliminates the instances of corrupt cronyism that taint that otherwise good system.

Moreover, many of the nations with economic citizenship programs use this approach.

But here’s the downside. If you sell citizenship directly, the money goes to the government rather than to the productive sector of the economy.

That might be acceptable if it meant that the politicians reduced or eliminated some tax. But I fear the real-world impact would be to simply give the crowd in Washington more money to waste.

So perhaps the real challenge is to figure out some smarter way of operating the EB-5 program so we get even more private investment and job creation while also reducing opportunities for cronyist intervention.

P.S. If you want to enjoy some immigration-themed humor, here’s some involving Peru and Canada.

P.P.S. While I don’t like government getting more money, that shouldn’t be the only factor when grading a policy proposal. I fretted, for instance, that pot legalization in Colorado would be a mixed blessing because it would generate more tax revenue. But thanks to Colorado’s Taxpayer Bill of Rights, the politicians haven’t been able to spend all the new money, so it’s unambiguously a win-win situation.

P.P.P.S. The Princess of the Levant is in America because of the immigration lottery, so I certainly won’t be complaining too much about arbitrary systems. [correction: The PoTL has informed me that her U.S. residency is the result of her grandfather’s application and not the lottery]

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It’s not often that I disagree with the folks who put together the Wall Street Journal editorial page. For instance, they just published a great editorial on that cesspool of cronyism and corruption that is otherwise known as the Export-Import Bank.

Isn’t it great that the voice of capitalism actually supports genuine free markets!

That being said, a recent editorial rubs me the wrong way.

It’s about the presumably quixotic presidential campaign of Senator Bernie Sanders. These excerpts will give you a flavor of what the WSJ wrote.

Vermont Senator Bernie Sanders, an avowed independent Socialist, has decided to run for the Democratic presidential nomination… He thinks the American economy is fundamentally unfair, and that government must tax and spend even more heavily… He thinks Social Security should increase benefits, no matter that it is heading toward insolvency. Higher taxes can make up the difference. …He wants single-payer health care, though his own state gave up the experiment as too expensive.

So what’s my disagreement?

I realize I’m being a nit-picker, but I don’t like the fact that the WSJ editorial is entitled “An Honest Socialist.”

My gripe is that Sanders isn’t honest. A genuine socialist believes in government ownership of the means of production. In other words, nationalized factories, government-run businesses, and collective farms. If Sanders believes in these policies, he’s remarkably reluctant to share his perspective.

In reality, Sanders is like Obama. You can call him a statist, a corporatist, or even (as Tom Sowell correctly notes) a fascist.

In other words, lots of redistribution and lots of back-door government control of the private sector, but not a lot of People’s Factory #58 or People’s Farm #91.

Though it is true that Sanders wants the government to directly run the healthcare system (akin to the horrifying U.K. approach), but at most that means he’s a “partial socialist” (or, to modify the WSJ‘s title, a “mostly dishonest socialist”).

Moreover, he doesn’t bring anything new to the presidential race, at least from a policy perspective.

There’s only a trivially small difference, for instance, between Hillary Clinton’s lifetime rating of 10.6 from the National Taxpayers Union and Bernie Sanders’ lifetime rating of 9.4. They both earned their failing grades by spending other people’s money with reckless abandon.

Though it’s worth noting that both Clinton and Sanders are “more frugal” than Barack Obama, who earned a lifetime rating of 9.0. I guess this is why the phrase “damning with faint praise” was invented.

The only difference between Hillary, Obama, and Sanders is tone. Here’s some of what Charles Cooke wrote for National Review.

Sanders does not play games with words…he steadfastly refuses to pretend that he represents moderation. …Sanders is to public policy and professional politicking what Joe Biden is to personality. He is open, blunt, unapologetic, compelling, ready to debate.

Which is in stark contrast to Hillary Clinton’s pabulum.

…the Democratic primary is being dominated by a corrupt, controlling, soulless, cynical, entitled, and mostly synthetic avatar named Hillary Clinton, and, in consequence, it is almost entirely devoid of ideas. …Hillary and her team stick to meaningless and saccharine banalities, almost all of which, one presumes, have been poll-tested within a fraction of an inch. …At no time does she stake out a vision. At no time does she adopt a controversial or momentous position. Instead, she hides behind corporately assembled strings of mawkish, semi-literate tosh.

So the difference between Clinton and Sanders is that he’s proud of his statism and she wants to hide her radical agenda.

But it doesn’t matter what they say or what they call themselves, the bottom line is that their policies are destructive, both economically and morally.

P.S. Since Senator Sanders is from Vermont, it’s both amusing and ironic that the Green Mountain State’s government-run healthcare system self destructed.

P.P.S. Since we’re on the topic of socialism, it’s worth pointing out that Jesus wasn’t in that camp. Though I’m not sure we can say the same thing about the Pope.

P.P.P.S. Heck, Jesus may have been a libertarian.

P.P.P.P.S. If you like socialism humor, click here, here, and here.

P.P.P.P.P.S. Switching to another topic (and one where there’s zero humor), you may remember that I wrote a few days ago about the horror of so-called civil asset forfeiture.

This happens when the government arbitrarily seizes your money and/or property without convicting you of a crime. Or even without charging you with a crime.

Well, here’s a video from the Institute for Justice about a new tragic example of theft by government.

If this doesn’t get you angry, you probably need counseling. This story reminds me of the Michigan family that was similarly victimized.

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I’m a huge fan of a simple and fair flat tax.

Simply stated, if we’re going to have some sort of broad-based tax, it makes sense to collect revenue in the least-damaging fashion possible.

And a flat tax achieves that goal by adhering to the principles of good tax policy.

  1. A low tax rate – This is the best-known feature of the flat tax. A low tax rate is designed to minimize the penalty on work, entrepreneurship, and other forms of productive behavior.
  2. No double taxation of saving and investment – The flat tax gets rid of the tax bias against income that is saved and invested. The capital gains tax, double tax on dividends, and death tax are all abolished. Shifting to a system that taxes economic activity only one time will boost capital formation, thus facilitating an increase in productivity and wages.
  3. No distorting loopholes – With the exception of a family-based allowance designed to protect lower-income people, the flat tax eliminates all deductions, exemptions, shelters, preference, exclusions, and credits. By creating a neutral tax system, this ensures that decisions are made on the basis of economic fundamentals, not tax distortions.

All three features are equally important, sort of akin to the legs of a stool. And if we succeeded with fundamental reform, it would mean an end to the disgraceful internal revenue code.

But just because an idea is good policy doesn’t necessarily mean that it’s also good politics.

So let’s delve into the debate over whether the flat tax is a winning political issue as well as a pro-growth reform.

Writing for the Weekly Standard, Steve Moore of the Heritage Foundation thinks the flat tax has political legs.

…the flat tax is again the rage in a presidential primary. A number of GOP candidates, including Rand Paul, Rick Perry, Ted Cruz, and Scott Walker, are looking to go flat with a radically simplified postcard tax return. …Ripping up the 70,000-page tax code has visceral appeal to voters.The way to sell the flat tax is as the ultimate Washington versus America issue. The only people who benefit from a complicated, barnacle-encrusted 70,000-page tax code are tax attorneys, accountants, lobbyists, IRS agents, and politicians who use the tax code as a way to buy and sell favors. The belly of the beast of corruption in American politics is the IRS tax code. The left keeps saying it wants to end the corrupting influence of big money in politics. Fine. By far the best way to do that is enact a flat tax and D.C. becomes the Sahara Desert.

I like what Steve is saying.

And I specifically agree that the best way of selling tax reform is to point out that it’s a Washington-versus-America issue.

When I first started giving speeches about the flat tax in the 1990s, I focused on the pro-growth and pro-competitive impact of lower marginal tax rates and reductions in double taxation.

People largely agreed with those points, but they didn’t get excited.

I soon learned that they instinctively liked the flat tax because they saw it as a way of cleaning out the stables of a corrupt system. In other words, they wanted tax reform mostly for reasons of fairness.

But with fairness properly defined, meaning all taxpayers playing by the same rules. Not the left’s definition, which is based on punishing success with high marginal tax rates.

Steve concurs.

So can the flat tax catch the populist tide of voter rage and angst over an economy that has squeezed the middle class for nearly a decade? Who knows? What seems certain is Democrats will run a class warfare campaign of raising tax rates on the rich. But envy isn’t an economic revival policy. Republicans can win this debate by going on the offensive and reminding voters that the best way to grow the economy, create jobs, and increase tax payments by the rich is to flatten the code. Flat is the new fair.

So does this mean the flat tax is a slam-dunk issue?

Ramesh Ponnuru of National Review is unconvinced. Here’s some of what he wrote about the candidates pushing fundamental reform.

They may have some creative ideas to get around problems with previous flat-tax proposals. But I have my doubts about whether a flat tax could be…as politically attractive as Moore suggests.

Ramesh is particularly skeptical whether the flat tax can be more appealing than the Lee-Rubio tax plan.

I have my doubts about whether a flat tax could be free from the objections Moore raises against Lee-Rubio… A 15 percent flat tax could also expose many more millions of people to tax increases than Lee-Rubio does; and it seems highly unlikely to reduce tax bills for as many people as Lee-Rubio does.

At the risk of sounding like a politician, I agree with both Steve and Ramesh.

Taking them in reverse order, Ramesh is correct that a flat tax faces an uphill battle. He specifically warns that a flat tax might result in higher fiscal burdens for millions of middle-class taxpayers.

Ultimately, that would depend on the tax rate, the size of the family-based allowance, and whether tax reform also was a tax cut. And those choices could be easier to make if Republicans actually demonstrated some political acumen and modernized the revenue-estimating system at the Joint Committee on Taxation.

And Ramesh also points out, quite appropriately, that the flat tax will create strong opposition from interest groups that benefit from provisions in the current system.

But Steve is correct that people want bold reform, which is a proxy for ending tax-code corruption. I’ve already praised the Lee-Rubio plan, which Ramesh likes, but I have a hard time imagining that such a plan will seize the public imagination like a flat tax.

Moreover, the Lee-Rubio plan is a huge tax cut. Since I think good reform is more likely if a plan lowers the overall tax burden, I consider that to be a feature rather than a bug.

But it does mean you have to fight a two-front war, battling both those who benefit from the current system as well as those who don’t want to reduce the flow of revenue to Washington.

These are big obstacles, whether we’re talking about an incremental plan like Lee-Rubio or big-picture reform like a flat tax.

Which is why, regardless of what happens with elections, I’m not overly optimistic about making progress. Unless, of course, we figure out some way of dealing the growing burden of federal spending. Which necessarily requires genuine entitlement reform.

P.S. Don’t forget that Barack Obama reportedly will be introducing a very simple tax reform plan.

P.P.S. Since we’re talking about the impact of policies on the election, my colleague Michael Cannon points to some very low-hanging fruit.

For more than five years, the executive branch has been issuing illegal subsidies that personally benefit the most powerful interest group in the nation’s capital: members of Congress and their staffs. …executive-branch agencies have broken the law, over and over, to protect ObamaCare. …The longest-running and perhaps most significant way the administration has broken the law to protect ObamaCare is by issuing illegal subsidies to members of Congress.

What’s Michael talking about?

When congressional Democrats passed the Patient Protection and Affordable Care Act (ACA), they were so desperate to pass a health care law that the ACA did not receive the scrutiny most bills do. Many members of Congress and their staffs were therefore surprised to learn that, as of the moment the president signed the ACA, that very law threw them out of their health plans. The ACA prohibits members of Congress and their staffs from receiving health coverage through the Federal Employees’ Health Benefits Program. They remained free to purchase health insurance on their own, but they would have to do so without the $10,000 or so the federal government “contributed” to their FEHBP premiums.

But who cares what the law says.

Rather than risk Congress reopening the ACA to restore their lost health coverage — because who knows what other changes Congress might make in the process — the administration simply pretended that that part of the law didn’t exist. The Office of Personnel Management announced that members of Congress and their staffs could remain in the FEHBP until the ACA’s Exchanges launched in 2014.  …That still didn’t solve the president’s problems, however. The ACA says that as of 2014, the only coverage the federal government can offer members of Congress in connection with their employment is coverage created under the Act. In effect, that means Exchange coverage. But the law still cut off that $10,000 “employer contribution” to their health benefits. According to Politico, “OPM initially ruled that lawmakers and staffers couldn’t receive the subsidies once they went into the exchanges.” After the president intervened, OPM just ignored that part of the law and started issuing (illegal) subsidies on the order of $10,000 to hundreds of individual members of Congress and thousands of individual congressional staffers.

So what does all this have to do with the 2016 elections?

Well, as Michael points out, the GOP could make a lot of hay by going after the Obama Administration’s illegal favor for Capitol Hill.

Ending Congress’ special ObamaCare exemption — i.e., the bribes individual members of Congress and their staffs are receiving not to reopen ObamaCare — polls off the charts. More than 90 percent of voters believe this exemption is unfair.

The goal, of course, isn’t to deny the folks on Capitol Hill from getting pre-Obamacare subsidies for their health plans.

Instead, Michael is saying that these subsidies have to be restored in the proper fashion, which means amending the law, which will also open the door to other changes.

Which might mean actually addressing the real problems in our healthcare system.

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There’s a lot of navel-gazing analysis in Washington about whether to expect some sort of bipartisanship over the next two years.

I find such discussions very irritating because they assume that you automatically get good results when Republicans and Democrats both agree on a policy. My reaction, to put it mildly, is “these people are f@*&#^@g crazy!!!”

Was it progress when Republicans and Democrats conspired to bail out their contributors on Wall Street with TARP?

Was it progress when Republicans and Democrats joined hands to impose Bush’s no-bureaucrat-left-behind education scheme?

Was it progress when the first President Bush broke his read-my-lips promise and sided with Democrats to boost taxes and spending in 1990?

So you can see why I instinctively like gridlock. Simply stated, it’s better to do nothing if the alternative is to have more bad laws that expand the burden of government.

But perhaps I’m being too cynical. After all, sometimes bipartisanship accidentally produces good policies. Like when we got the Budget Control Act as part of the 2011 debt limit fight, which then led to the sequester.

Though I’m not holding my breath expecting similar good results over the next two years.

Why? Because as I said in my first comments during last week’s John Stossel show, the President is simply too far to the left to expect any progress.

I do acknowledge in the interview that you have to give Obama credit for ideological consistency, but his agenda of bigger government and more dependency doesn’t lead me to think we’ll get any good policy in the near future.

Here are a few additional points from the interview that are worth highlighting.

*This is still a weak recovery, perhaps most compelling illustrated by comparing what happened under Reagan with what’s been happening under Obama.

*But things have improved in the past couple of years, in part because there’s been progress in restraining the burden of government spending.

*Ironically, the President bragged that America’s been creating more jobs than Europe even though he wants to copy European policies.

*It’s also galling that the President says he wants to make America more competitive even though he’s pushing class-warfare taxation.

*Republicans also deserve criticism since some of them are advocating for higher gas taxes rather than the federalist approach of decentralization.

*On tax reform, if you give politicians a new tax, it’s very likely they will use the money to finance bigger government instead of abolishing an existing tax.

*My final comment from the interview brings us back to the central point of today’s post. Simply stated, bipartisanship isn’t good if it means more government.

P.S. I goofed last week when I wrote that median household income fell every year under Obama, and I repeated that mistake in the Stossel interview, which took place before I discovered that there was a very small increase in 2013. Well, I also made another mistake in the interview. I said that Kate Upton was the daughter of Congressman Fred Upton. That’s wrong. She’s actually his niece. Alas, yet another sign that I’m clueless about popular culture. I guess that means Kate won’t date me after the PotL finds another boyfriend.

P.P.S. Since we’re still debating over the issues Obama raised in his speech, I may as well call attention once again to my contribution to the U.S. News and World Report online debate on whether the State of the Union is strong. I’m doing okay in the overall reader rankings, but (as I write these words) I do have the third-highest number of “down” votes, so I gather that some of our leftist friends must not like what I wrote. So feel free to go to the article and click on the “up” arrow if you want to help me out.

P.P.P.S. Shifting to a less narcissistic topic, I wrote in 2013 that the Ohio Governor should be known as John “Barack” Kasich because he chose to expand Obamacare in his state. Now, as explained by Philip Klein of the Washington Examiner, we have Mike “Barack” Pence from Indiana.

…on Tuesday, he betrayed taxpayers when he embraced an expansion of Medicaid through President Obama’s healthcare law. …Pence buckled under pressure from hospital lobbyists who are eager to receive more federal money… Myopic Republican governors think they can fool conservatives by gaining token concessions on what remains a government-run healthcare program and calling it “free market reform.” But the Obama administration is playing the long game, realizing that if it keeps adding beneficiaries to the books, big government liberalism wins.

How disappointing. Yes, GOP governors are getting pressured by in-state lobbyists because of the lure of “free” federal money, but that’s no excuse for adopting a policy that will hurt federal taxpayers in the short run and state taxpayers in the long run.

This is yet another reason why we need to replace the federal Medicaid entitlement with a block grant.

P.P.P.P.S. I don’t want to close on a dour note, so let’s shift to sequestration, which was one of the topics in the Stossel interview. That was not only an unambiguous victory over big government, but it also resulted in some great political humor. You can see some of my favorite cartoons on the topic by clicking herehere, here, here, here, and here.

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Watching politicians give speeches, such as Obama’s State of the Union address, is an occupational hazard when you work at a think tank.

Which is why, in the past, I’ve heartily recommended the State-of-the-Union Bingo game developed by Americans for Tax Reform.

But I was in New York City for a television program about the President’s address, so I had to pretend I was an adult and pay attention to the speech.

That being said, the silver lining to that dark cloud is that the folks at U.S. News and World Report gave me an opportunity to add my two cents to an online debate on whether the President was correct to assert that the state of the union is strong.

In my contribution, I combined some dismal economic indicators and bad policy developments to argue that America could – and should – be doing much better.

Here are the bullet points from my article.

  • Economic growth has been anemic. Normally there are several years of above-average growth after a recession. These post-recession booms are very important since they help people recover lost income. But there’s been no boom during the supposed Obama recovery. We haven’t even climbed back up to the long-run average of 3 percent growth.
  • When the economy suffers from slow growth, it hurts the living standards of ordinary people. Probably the most damning statistic is that median household income has declined every year that Obama has been in the White House.
  • Another very grim piece of data is that America’s labor force participation rate has dropped to the lowest level in decades. Yes, it’s good news that the official unemployment rate has fallen, but it would be much better if it fell because of strong job creation instead of people giving up on finding work.
  • Since we’re talking about the unemployment rate, it’s worth noting that the jobless rate only started falling after the so-called stimulus ended and the burden of government spending began to decline. In other words, the good news was in spite of the president’s policies.
  • And since we mentioned government spending, let’s debunk one of the president’s big claims. He bragged about a falling deficit (not that a $400 billion-plus deficit is anything to brag about), but red ink has only declined because of policies that the president opposed, such as sequestration.

By the way, I need to make one correction. I didn’t realize the 2013 data on median household income had been released, and it turns out that there was a slight increase that year. So while the average household is more than $2000 poorer than when Obama took office, it’s not true that there’s been a decline every single year.

But that goof notwithstanding, I think my concluding remarks are spot on.

The bottom line is that the State of the Union is not strong. We’re suffering from anemic growth and income stagnation because of an ever-rising burden of taxes, spending and regulation. Yes, the president was right when he noted that we’ve created more jobs than Europe and Japan, but that’s hardly a big achievement since those nations have traveled even further in the wrong direction with statist policies.

In other words, what matters most, in terms of prosperity, is our long-run growth rate. And this is where Obama’s policies (like Bush’s policies) have hurt the country.

P.S. If you agree with my analysis, feel free to vote in the online debate and give me an “up arrow.” If you disagree with what I wrote, by contrast, I’m sure you have more important things to do than casting a vote.

P.P.S. I realize I’m being pedantic, but the two cartoons included in this post may be amusing, but they should have focused on the underlying disease of too much spending (particularly the problem of entitlement programs) rather than highlighting the symptom of red ink.

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Notwithstanding the landslide rejection of Obama and his policies in the mid-term election, I don’t think this will produce big changes in policy over the next two years.

Simply stated, the GOP does not have the votes to override presidential vetoes, so there’s no plausible strategy for achieving meaningful tax reform or genuine entitlement reform.

But that doesn’t mean that there won’t be important fiscal policy battles. I’m especially worried about whether we can hold on to the modest fiscal restraint (and sequester enforcement) we achieved as part of the 2011 debt limit fight.

Part of that victory was already negotiated away as part of the Ryan-Murray budget deal, to be sure, but there are still remaining budget caps that limit how fast politicians can increase so-called discretionary spending.

According to the Congressional Research Service, budget authority for defense is allowed to rise from $552 billion in 2014 to $644 billion in 2021. And budget authority for domestic programs is allowed to climb from $506 billion to $590 billion over the same period.

I think that’s too much spending, but the interest groups, lobbyists, cronyists, politicians, bureaucrats, and other insiders in Washington would like much bigger increases. And you won’t be surprised to learn that the Obama Administration also wants to bust the spending caps.

This is why I’m very worried that some Republicans are undercutting their negotiating position by saying that there will be no government shutdowns.

Let me explain how these issues are connected. At some point next year, Republicans on Capitol Hill will be responsible for putting together spending bills for the following fiscal year. They presumably (or am I being too optimistic?) will put together budget bills that comply with the existing spending caps.

Obama will then say he will veto such legislation and demand that Republicans unilaterally surrender by enacting bigger spending increases and also gutting sequestration. The GOP will then have two options:

A) they can surrender.

B) they can continue to send the President spending bills that comply with the law.

But if they go with option B and the President uses his veto pen, then the government shuts down. And even though the shutdown only occurs because the President wants to renege on the deal he signed in 2011, Republicans are afraid they’ll get blamed.

The Washington Post reports on this fearful attitude, citing the anti-shutdown perspective of the incoming Senate Majority Leader.

A day after he won reelection and Republicans retook the Senate, Sen. Mitch McConnell (R-Ky.) left no doubt… “Let me make it clear: There will be no government shutdowns…,” McConnell said in a valedictory news conference in Louisville.

But that view irks some lawmakers who worry Obama will then have a blank check.

The first battle may revolve around immigration amnesty, but – as noted above – I’m more focused on fiscal fights.

But McConnell could be tripped up by the same conservative forces that have undercut Boehner since he became speaker in 2011. The issue this time is Obama’s expected executive action to overhaul the nation’s immigration system.conservatives…have urged McConnell and Boehner to fight back by allowing only a short-term budget bill that would keep government agencies open until early next year. These conservatives believe that once Republicans hold both chambers of Congress next year, they can force Obama to accept a budget bill that would prohibit him from implementing his executive order on immigration.

At this point in the article, the reporter, Paul Kane, engages in some anti-factual editorializing.

…the days of brinkmanship could return with a vengeance, and the government could once again be shut down. That could provide a devastating blow to Republicans, hurting their chance to win back the White House and hold on to their relatively slim Senate majority in 2016.

Huh?!? Republicans just won a landslide, so why are we supposed to believe last year’s shutdown was “a devastating blow”?

Mr. Kane also refers to a shutdown later in the article as a “fiscal calamity” even though he shows no evidence (because there wasn’t any) that government shutdowns cause any damage.

But there is at least one person who is convinced by this narrative. And that person, Senator McConnell, is preemptively trying to convince other GOP Senators to give Obama the upper hand in any fiscal negotiations.

McConnell’s advisers are worried enough that by Friday evening they were circulating a memo showing how damaging last year’s shutdown was to the Republican Party — an effort designed to counter conservatives who point to this month’s triumphant election as proof that the shutdown did little damage. …The memo showed that in Gallup polling from late 2012 until this month, …Republicans held steady just a couple of points lower through 2012 and most of 2013 — until the 16-day shutdown of the federal government in October 2013. In just a few weeks, the McConnell chart shows, Republican favorability plummeted 10 points. It has taken a year for it to climb back to where it was before the shutdown.

But who cares about “favorability” ratings. The poll that really matters is the one that takes place on election day.

And here’s some of what I wrote in my post about lessons that could be learned from the 2014 elections.

Back in 2011, I explained that Republicans could play hard ball, largely based on what really happened during the 1995 government shutdown. And in 2013, I again defended a shutdown, pointing out that voters probably wouldn’t even notice that some government offices were closed, but they would remember that the GOP was branding itself as the anti-Obamacare party. The establishment, by contrast, thought the shutdown was a disaster for Republicans. …many…Republicans felt the same way, excoriating Senator Cruz and others who wanted a line-in-the-sand fight over government-run healthcare. The moral of the story isn’t that shutdowns necessarily are politically desirable, but rather that it’s very important for a political party to find visible ways of linking itself to popular causes (such as ending Obamacare, fighting big government, etc).

At least one person agrees with me. Jeffrey Lord, writing for the American Spectator, points out the GOP establishment was wrong about the political impact of the 2013 government shutdown.

The whole event was giving prominent Republicans in and out of office the political willies. …Republican senators, congressmen, governors, ex-office holders, potential presidential candidates, lobbyists and pundits…were spreading the word. That word? …it was some version of curtains for the GOP. The party would be toast. …they all got it wrong. Not just wrong, but Big Time Wrong. A week ago the Republican Party — barely a year away from the government shut down these folks were bewailing in various terms as bad strategy that “will lose more” for Republicans than Democrats — won a blowout election. …Will Republicans learn anything here?Do you think Mitch McConnell makes the connection between the government shutdown of 2013 and the fact that he is about to become Senate Majority Leader?

To be fair, we don’t know what would have happened if there wasn’t a shutdown in 2013, so maybe the GOP still would have taken the Senate.

But there’s also no doubt that the GOP benefited by having a big public fight about Obamacare. Voters didn’t remember the shutdown, but they did remember that Republicans were against the President’s government-run healthcare scheme and they remembered that Democrats were for it.

I have no idea whether that made a difference in one Senate race of six Senate races, but Obamacare clearly was an albatross for Democrats.

In closing, I want to point out that there are limits to a shutdown strategy.

Picking a fight (or, more accurately, refusing to surrender to Obama) in 2015 is almost surely a winning strategy. But having the same fight in October of 2016 probably wouldn’t be very smart, particularly since the establishment press would do everything possible to spin the fight in ways that advance Hillary Clinton (or some other Democrat presidential nominee).

In other words, context matters. Pick the right fight.

But the bottom line is that Republicans – assuming they don’t intend to acquiesce on every single issue – must be prepared to let Obama veto spending bills and shut down the government.

Returning to the American Spectator story, Ted Cruz may not be very popular with some of his colleagues, but I think he made an unassailable point about what happens if the GOP unilaterally disarms.

Cruz…asked them for their alternative. Cruz paused, then said that the response he got was “the sound of crickets chirping.”

P.S. One reason why Republicans are skittish about shutdowns is that they think they last the 1995 fight with Bill Clinton. But if you lived through that battle (or if you look at contemporaneous news reports), it’s clear the Republicans had the upper hand.

P.P.S. Here are the five lessons I shared immediately after the 2013 shutdown fight.

P.P.P.S. If you want to enjoy some shutdown humor, click herehere, here, and here. And if you prefer sequester cartoons, click here, here, here, here, here, and (my favorite) here.

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Wow, Barack Obama and the Democrats suffered a thermonuclear butt kicking. This was 1994 and 2010 put together.

When the dust settles after recounts and run-offs, it appears that the GOP will have picked up 9 Senate seats. That’s one more than I predicted, and I thought I was probably overstating the GOP wave.

The House results are equally remarkable. There are a handful of close races that haven’t yet been decided, but it seems that Republicans will control at least 246 seats and may even hit or exceed my prediction of 249 seats. And that estimate at the time was way too high, based on what almost all the experts were predicting.

So what lessons, if any, can we learn from these results (other than that I do a decent job of predicting mid-term elections)?

1. Obama has been a disaster for his party. At their high point in 2009, Democrats controlled 60 seats in the Senate and 257 seats in the House of Representatives. But thanks to unpopular and misguided policies such as Obamacare and the faux stimulus, the President created conditions for GOP landslides in 2010 and 2014. And don’t forget that Republicans also have made huge gains in state legislatures during Obama’s presidency. I already joked that libertarians were going to give the President a “man of the year” award for reawakening interest in the principles of liberty, but Republicans may want to give him an even bigger award and make it official rather than satirical.

2. Obamacare is still deeply unpopular. It appears that at least 17 Democratic Senators since 2010 have been replaced by anti-Obamacare Republicans. That’s a remarkably large number of casualties. And don’t forget what happened to House Democrats in 2010. Some advocates of government-run healthcare claim that voters are no longer agitated about Obamacare and that Republicans didn’t make it a big issue. But if that’s the case, why did Republicans dramatically increased their focus on Obamacare as the elections got closer?

If you want an example of whistling past the graveyard, considering this blurb from an article in The Hill last April.

White House senior adviser Dan Pfeiffer on Sunday rejected the suggestion that Republicans will take control of the Senate in the midterm elections, saying that the GOP argument to repeal ObamaCare is a “political loser.”

I wonder what he would say if asked about Obamacare today?

3. The government shutdown was almost certainly a net plus for the GOP. Back in 2011, I explained that Republicans could play hard ball, largely based on what really happened during the 1995 government shutdown. And in 2013, I again defended a shutdown, pointing out that voters probably wouldn’t even notice that some government offices were closed, but they would remember that the GOP was branding itself as the anti-Obamacare party. The establishment, by contrast, thought the shutdown was a disaster for Republicans. Here’s some of what one academic wrote last October.

…the shutdown leveled the House playing field in a rather unexpected manner. …in a Congressional election today, Democrats would retake the House with >90% probability and a 50-seat margin.

And remember that many establishment Republicans felt the same way, excoriating Senator Cruz and others who wanted a line-in-the-sand fight over government-run healthcare. The moral of the story isn’t that shutdowns necessarily are politically desirable, but rather that it’s very important for a political party to find visible ways of linking itself to popular causes (such as ending Obamacare, fighting big government, etc).

4. Voters still hate taxes. I’m stunned that Governor Brownback won reelection in Kansas, but I’m even more surprised that pro-tax Democrat gubernatorial candidates lost in deep-blue states such as Maryland, Illinois, and Massachusetts. The one common theme is that voters – when given a real option – generally prefer candidates who will let them keep more of their money. We also can learn something by reviewing the outcome of various ballot initiatives. By a 2-1 margin, Tennessee voters amended their constitution to prohibit an income tax from every being adopted. And by a 3-1 margin, Georgia voters made sure the top tax rate could never be raised. On the other hand, more than 60 percent of voters in Illinois voted for an advisory referendum that called for a class-warfare tax hike (even though they voted for a governor who will block that from happening).

A few other observations.

Scott Walker’s victory, along with the outcome of gubernatorial races in places such as Michigan and Illinois, suggests that unionized state bureaucrats no longer have carte blanche to pillage taxpayers. Or at least they no longer have the necessary political muscle to endlessly line their pockets at the expense of the overall electorate.

Rand Paul gets points for the most clever political satire of the evening, popularizing the #hillaryslosers hashtage along with some amusing images. Here’s the one for Kentucky.

Let’s close by reveling in some Schadenfreude. Here are some excerpts from a story in the Washington post in early 2013.

President Obama…is taking the most specific steps of his administration in an attempt to ensure the election of a Democratic­-controlled Congress in two years. …Obama, fresh off his November reelection, began almost at once executing plans to win back the House in 2014, which he and his advisers believe will be crucial to the outcome of his second term and to his legacy as president. …Obama has committed to raising money for fellow Democrats, agreed to help recruit viable candidates, and launched a political nonprofit group dedicated to furthering his agenda and that of his congressional allies. The goal is to flip the Republican-held House back to Democratic control, allowing Obama to push forward with a progressive agenda on gun control, immigration, climate change and the economy during his final two years in office… Obama has committed to eight fundraisers for the Democratic Congressional Campaign Committee this year… The president has also pledged to put his formidable campaign organization, now known as Organizing for Action, behind Democratic House candidates and to find ways to share its rich trove of voter data with the party’s campaign committee. …“If 2012 was a referendum on President Obama, then 2014 will be a referendum on the tea party Congress,” Israel said. “And the president and House Democrats are joined at the hip on this.”

Gee, things didn’t exactly turn out the way Obama hoped.

But Congressman Israel was right. Obama and the Democrats were joined at the hip.

Now the big question is whether voters will get a clear choice between big government and small government in 2016. If they do, this hypothetical poll shows the outcome.

But if it’s another Tweedle Dee vs Tweedle Dum election, then Washington’s ruling class will win regardless.

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