Sunday, August 28, 2011

Evidence of the Obvious

Friday, August 26, 2011


America still has wealthy business people with a sense of justice and public good, people like Warren Buffet, Bill Gates, and patriotic millionaires for fiscal strengh and common sense who lobby for higher taxes for people like themselves.
Unfortunately the icons of today have been loud and crazy like Donald Trump (your fired) and "Neutron" Jack Welch and " Chainsaw" Al Dunlap (Sunbeam) who were all famous for raising profits and by CUTTING JOBS.
The recovery of General Motors and Chrysler demonstrates that in collaboration with government and labor American enterprise can revive in ways that not only save jobs but create them.
We are told business will not invest unless they have certainty, are you kidding me? Did the Wright brothers have certainty at Kitty Hawk, did Steve Jobs have certainty on the I pad or I phone?
We had certainty on Wall Street they knew they were selling Junk and they knew people were going to buy them, and they knew they were going to be insured.
What's happened to America Businessman he wants a SURE DEAL, sorry thats not the way it works!
Unless of course all you are about is getting rid of this President and nothing else!

Thank You, Tea Party!

If you really want to light the fuse of a liberal Democrat, compare Barack Obama's economic performance after 30 months in office with that of Ronald Reagan. It's not at all flattering for Mr. Obama.
The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus.
By the end of the summer of Reagan's third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and '84 output was growing so fast the biggest worry was that the economy would "overheat." In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a "double-dip" recession. By the end of Reagan's first term, it was Morning in America. Today there is gloomy talk of America in its twilight.
My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn't.
The Reagan philosophy was to incentivize production—i.e., the "supply side" of the economy—by lowering restraints on business expansion and investment. This was done by slashing marginal income tax rates, eliminating regulatory high hurdles, and reining in inflation with a tighter monetary policy.

The Keynesians in the early 1980s assured us that the Reagan expansion would not and could not happen. Rapid growth with new jobs and falling rates of inflation (to 4% in 1983 from 13% in 1980) is an impossibility in Keynesian textbooks. If you increase demand, prices go up. If you increase supply—as Reagan did—prices go down.
The Godfather of the neo-Keynesians, Paul Samuelson, was the lead critic of the supposed follies of Reaganomics. He wrote in a 1980 Newsweek column that to slay the inflation monster would take "five to ten years of austerity," with unemployment of 8% or 9% and real output of "barely 1 or 2 percent." Reaganomics was routinely ridiculed in the media, especially in the 1982 recession. That was the year MIT economist Lester Thurow famously said, "The engines of economic growth have shut down here and across the globe, and they are likely to stay that way for years to come."
The economy would soon take flight for more than 80 consecutive months. Then the Reagan critics declared what they once thought couldn't work was actually a textbook Keynesian expansion fueled by budget deficits of $200 billion a year, or about 4%-5% of GDP.
Robert Reich, now at the University of California, Berkeley, explained that "The recession of 1981-82 was so severe that the bounce back has been vigorous." Paul Krugman wrote in 2004 that the Reagan boom was really nothing special because: "You see, rapid growth is normal when an economy is bouncing back from a deep slump."
Mr. Krugman was, for once, at least partly right. How could Reagan not look good after four years of Jimmy Carter's economic malpractice?
Fast-forward to today. Mr. Obama is running deficits of $1.3 trillion, or 8%-9% of GDP. If the Reagan deficits powered the '80s expansion, the Obama deficits—twice as large—should have the U.S. sprinting at Olympic speed.
The left has now embraced a new theory to explain why the Obama spending hasn't worked. The answer is contained in the book "This Time Is Different," by economists Carmen Reinhart and Kenneth Rogoff. Published in 2009, the book examines centuries of recessions and depressions world-wide. The authors conclude that it takes nations much longer—six years or more—to recover from financial crises and the popping of asset bubbles than from typical recessions.
In any case, what Reagan inherited was arguably a more severe financial crisis than what was dropped in Mr. Obama's lap. You don't believe it? From 1967 to 1982 stocks lost two-thirds of their value relative to inflation, according to a new report from Laffer Associates. That mass liquidation of wealth was a first-rate financial calamity. And tell me that 20% mortgage interest rates, as we saw in the 1970s, aren't indicative of a monetary-policy meltdown.
There is something that is genuinely different this time. It isn't the nature of the crisis Mr. Obama inherited, but the nature of his policy prescriptions. Reagan applied tax cuts and other policies that, yes, took the deficit to unchartered peacetime highs.
But that borrowing financed a remarkable and prolonged economic expansion and a victory against the Evil Empire in the Cold War. What exactly have Mr. Obama's deficits gotten us?
The U.S. economy grew a meager 1% and corporate profits moderated in the April-July period amid weak consumer spending, stalled exports and a smaller buildup in inventories, highlighting the weakness of the recovery.

Thursday, August 25, 2011

Marco Rubio

You heard it here first. He will be the GOP VP nominee for 2012. He can run with a Tea Partier or a moderate presidential candidate with authenticity. He is Hispanic and will deliver Florida, absent a landslide. He is a bright guy, telegenic and well spoken. Though his resume is thin, no more so than President Obama's when he ran at the top of the ticket.

This will position Rubio well for a run at the top spot in 2016, provided the party doesn't spectacularly crash and burn in 2012. Should they take an ugly loss, Jon Huntsman will be very viable next time around, much as Nixon was following Goldwater.

The rising impatience with the leadership of President Obama was epitomized on Aug. 8 in the middle of one of the now-habitual Wall Street roller coasters. His speech on the economy was 53 minutes late. What showed on TV screens was an empty White House podium, an image suggestive of the absence of leadership. When the president did speak, the best he could come up with was "We've always been and always will be a triple-A country." The market's response was a Bronx cheer, a drop of another 300 points.

Mr. Obama seems unable to get a firm grip on the toughest issue facing his presidency and the country—the economy. He now asserts he is going to "pivot" to jobs. Now we pivot to jobs? When there are already 25 million Americans who are either unemployed or cannot find full-time work? Does this president not appreciate what is going on?

Fewer Americans are working full-time today than when Mr. Obama took office. We have lost over 900,000 full-time jobs in the last four months alone, and long-term unemployment is at a post-World War II high. The public's faith in his ability to deal with the economy has plunged. As Doyle McManus of the L.A. Times put it, "Can this president persuade voters to let him keep his job when so many have lost theirs?" Even Jimmy Carter didn't plumb the depths of national dissatisfaction revealed in the stunning Gallup poll taken Aug. 11-13. The president's approval rating was only 39% with a mere 26% approving of his handling of the economy.

Meanwhile, everyone in the business world is pleading for some kind of adult supervision to build a national platform for sustained growth that includes a long-term fiscal plan that addresses our ballooning debt. They are desperate for strong leadership and feel that all we are getting out of Washington is a lot of noise as Democrats and Republicans blame one another.

Since the president is the one who represents all of America and all Americans, the buck stops with him rather than with the Congress. It is the president's job to offer a coherent program for the twin threats of a static economy and an unsustainable explosion of our debts and deficits. But the only core issue on which he took a clear position in the recent debt-ceiling negotiations was that it would have to include new taxes on the wealthy—and he didn't even hold to that.

He made the politically tested and calculated statement that if you raise taxes on billionaires and millionaires you could solve the problem. This is not so. Even for those who support higher taxes on the wealthy, as I do, we must remember that we have an income tax system in which fully half the "taxpayers" pay no tax at all, and in which the variety of loopholes cries out for a real reform of the tax code. Even if the government instituted a 100% tax on both corporate profits and personal incomes above $250,000 per year, it would yield enough revenue to run the government for only six months. Why? Because under Mr. Obama's presidency, government spending has swelled to 24% of GDP from 18%.


With the recovery sputtering, the White House and its allies have been blaming government spending cuts, or what the neo-Keynesians call "fiscal contraction." This is a dubious economic theory even if spending were being cut, but yesterday's mid-year report from the Congressional Budget Office shows definitively that there's been nothing close to contraction in Washington.

That's the real news in the CBO numbers, which show that spending in fiscal 2011 (which ends on September 30) will hit a new high of $3.6 trillion, up $141 billion from 2010. That's higher than the previous record in 2009 of $3.5 trillion, which was supposed to be the peak of the "temporary" stimulus spending.

As the nearby chart shows, that is also nearly $900 billion more spending than in 2007. Total federal outlays will have increased by roughly one third in a mere four years. This hasn't happened since the Great Inflation of the late 1970s.

Give President Obama and the two Pelosi Congresses credit for this much: They said they would spend our way out of recession, and they sure gave it the old Beltway try. The problem is that we got the spending without the promised economic growth.
This is the real cause of our current deficit and debt woes. As a share of the economy, spending will once again come in at nearly 23.8%, up from 20.7% as recently as 2008. Defense spending is expected to increase by only $14 billion to $703 billion in 2011, despite the surge in Afghanistan. The bigger increases are in Medicare, Medicaid, and the usual panoply of entitlements and other payments to individuals.
All of this means the deficit will roll in at nearly $1.3 trillion, or 8.5% of GDP this year. That's down a mere $10 billion from fiscal 2010, and we suppose taxpayers should be grateful for small fiscal favors.
The reason for this small deficit dip is that total tax revenues will climb in fiscal 2011 by about $150 billion. Individual income tax receipts will increase this year by about 21%, or $190 billion, though tax rates have stayed the same. Even with this good news, revenues will still come in at only 15.3% of GDP, which is far below the modern historical average of more than 18%.
Revenues would have been about $115 billion higher without the temporary payroll tax cut pressed by President Obama. But that tax cut hasn't provided any economic lift, and overall growth simply isn't fast enough to get revenues back to normal. Merely returning to an average economic expansion would reduce the deficit by 3% of GDP a year, or hundreds of billions of dollars.
Looking forward, CBO forecasts a sunnier fiscal picture, but it is based on assumptions that will never come true. The deficit is projected to fall to $973 billion in fiscal 2012, then fall again to $510 billion in 2013, and to a mere $265 billion in 2014.

But this assumes that federal spending will grow by only $12 billion in 2012, a level of spending control that even Ronald Reagan never achieved. President Obama wants much more spending next year and so does the Senate. Oh, and Medicare payments to doctors will fall by nearly 30% starting in 2012. Congress has been promising this cut in payments since 1997, but it never happens and would hurt medical care if it did.

The rest of CBO's fantasy forecast comes from what it says will be "the sharp increases in revenues that will occur when provisions of [the Bush era tax cuts extended last year] expire." So CBO estimates that federal taxes as a share of GDP will leap to 19% in 2013 and 20.2% in 2014 from 15.3% today. And we are supposed to believe that economic growth will soar to 4.4% and 5% in 2014 and 2015 after huge tax increases on capital gains, dividends, small businesses and workers in 2013. Beam us up, Scotty.

Wednesday, August 24, 2011

Yes there is, sound fiscal and monetary policy and broad tax cuts!

Bill Clinton endorses Bachmann for President!

BREAKING NEWS: President Obama has just confirmed that the DC earthquake occurred on a rare and obscure fault-line, apparently known as "Bush's Fault". Obama also announced that the Secret Service and Maxine Waters continue an investigation of the quake's suspicious ties to the Tea Party.

Conservatives, however, have proven that it was caused by the founding fathers rolling over in their graves.

Tuesday, August 23, 2011


It's conventional wisdom in Washington to blame the federal government's dire financial outlook on runaway entitlement spending. Unless we rein in Social Security, Medicare and Medicaid, the conventional wisdom goes, the federal government is headed for disaster.
That's true in the long run. But what is causing massive deficits now? Is it the same entitlements that threaten the future?
Yes, say some conservatives who favor making entitlement reform a key issue in the 2012 campaign. "We're $1.5 trillion in debt," Weekly Standard Editor Bill Kristol said Sunday, referring to this year's projected deficit. "Where's the debt coming from? It's coming from entitlements."
There's no doubt federal spending has exploded in recent years. In fiscal 2007, the last year before things went haywire, the government took in $2.568 trillion in revenues and spent $2.728 trillion, for a deficit of $160 billion. In 2011, according to Congressional Budget Office estimates, the government will take in $2.230 trillion and spend $3.629 trillion, for a deficit of $1.399 trillion.
That's an increase of $901 billion in spending and a decrease of $338 billion in revenue in a very short time. Put them together, and that's how you go from a $160 billion deficit to a $1.399 trillion deficit.
But how, precisely, did that happen? Was there a steep rise in entitlement spending? Did everyone suddenly turn 65 and begin collecting Social Security and using Medicare? No: The deficits are largely the result not of entitlements but of an explosion in spending related to the economic downturn and the rise of Democrats to power in Washington. While entitlements must be controlled in the long run, Washington's current spending problem lies elsewhere.
A lot of the higher spending has stemmed directly from the downturn. There is, for example, spending on what is called "income security" -- that is, for unemployment compensation, food stamps and related programs. In 2007, the government spent $365 billion on income security. In 2011, it's estimated to spend $622 billion. That's an increase of $257 billion.
Then there is Medicaid, the health care program for lower-income Americans. A lot of people had lower incomes due to the economic downturn, and federal expenditures on Medicaid -- its costs are shared with the states -- went from $190 billion in 2007 to an estimated $276 billion in 2011, an increase of $86 billion. Put that together with the $257 billion increase in income security spending, and you have $343 billion.
Add to that the $338 billion in decreased revenues, and you get $681 billion -- which means nearly half of the current deficit can be clearly attributed to the downturn.
That's a deficit increase that would have happened in an economic crisis whether Republicans or Democrats controlled Washington. But it was the specific spending excesses of President Obama and the Democrats that shot the deficit into the stratosphere.
There is no line in the federal budget that says "stimulus," but Obama's massive $814 billion stimulus increased spending in virtually every part of the federal government. "It's spread all through the budget," says former Congressional Budget Office chief Douglas Holtz-Eakin. "It was essentially a down payment on the Obama domestic agenda." Green jobs, infrastructure, health information technology, aid to states -- it's all in there, billions in increased spending.
As for the Troubled Assets Relief Program, or TARP -- it has no specific line in the budget, either, but that is because it was anticipated to pay nearly all of its own cost, which it has.
Spending for Social Security and Medicare did go up in this period -- $162 billion and $119 billion, respectively -- but by incremental and predictable amounts that weren't big problems in previous years. "We're getting older one year at a time, and health care costs grow at 7 or 8 percent a year," says Holtz-Eakin. If Social Security and Medicare were the sole source of the current deficit, it would be a lot smaller than it is.
The bottom line is that with baby boomers aging, entitlements will one day be a major budget problem. But today's deficit crisis is not one of entitlements. It was created by out-of-control spending on everything other than entitlements. The recent debt-ceiling agreement is supposed to put the brakes on that kind of spending, but leaders have so far been maddeningly vague on how they'll do it.
This issue could be an important one in the coming presidential race. Should Republicans base their platform on entitlement reform, or should they focus on the here and now -- specifically, on undoing the damage done by Obama and his Democratic allies? In coming months, the answer will likely become clear: entitlements someday, but first things first.

Monday, August 22, 2011


No, not the cherry kind silly.  I'm referring to the numerical symbol.  For man made global warming to occur, the CO2 released must remain in the atmosphere and it must effect climate change.  But recent data suggest that the CO2 may not remain in the atmosphere and while considering this new piece of data, it caused me to ponder a question.  How big is the atmosphere?  I mean there are certainly a lot of cars and the air, at least in Phoenix, can be very dirty.  But, remember that perception game everyone sees in (about) grade school?  The one where the narrow outer circle of a drawing has greater volume than the apparently larger inner circle?

That brings me to Pie and the volume of a sphere which is 4/3 x 3.14 (pie) r (radius) cubed (the number multiplied, by itself, 3 times).  So what is the volume of our atmosphere?  Well we just need to know the radius of the earth, calculate that number and subtact it from result using the radius including the atmosphere.

Turns out:

The "effective volume" of the Earth's atmosphere is about 4.2 billion cubic kilometers. This figure is the surface area of the Earth (509 million square kilometers) times the "effective thickness" of the atmosphere (8.2 kilometers, or about 27,000 ft). The effective thickness and volume are what the thickness and volume of the atmosphere would be if the entire atmosphere were at sea level conditions.

The actual volume of the atmosphere is considerably greater than its effective volume, as its pressure and density drop with increasing altitude. If we adopt the "Karman Limit" of 100 km elevation as the boundary between earth and space, the volume of the atmosphere would be 100 times 509 million or about 51 billion cubic kilometers. However, the Karman Limit is a non-physical and rather arbitrary boundary.

The above I found on the web, but the point is 4 billion square miles is a lot to fill.

Now I remember when I was little, my brother in law, an attorney, who hated the courtroom, taught me that when caught lying, attorneys yell louder.


Former Vice President Al Gore went on a profanity-laced tirade at the Aspen Institute Aug. 4 against the rising number of Americans who are skeptical about man-made global warming.

According to a Harris poll in July, only 44 percent of us now believe carbon dioxide emissions are warming the Earth, down from 51 percent in 2009 and 71 percent in 2007.

Global temperatures peaked in 1998. People have noticed winters are getting colder.

When evidence emerged in 2009 that scientists affiliated with the Climate Research Unit of the University of East Anglia in Britain were "hiding the decline" by fudging data, few journalists paid much attention.

But a lot of Americans did, apparently. In a Rasmussen poll Aug. 3, 69 percent of respondents said it was at least somewhat likely scientists have falsified research data.

According to global warming theory, carbon dioxide emissions from burning fossil fuels are trapping heat in the upper atmosphere, inexorably warming the planet.

The theory ignored inconvenient facts:

• In the Medieval Warm Period (950-1250 AD), and the Roman Warm Period (250 BC-400 AD), there were no automobiles or factories, but temperatures were warmer than now.
• In geologic history, CO2 concentrations in the atmosphere were much higher, but temperatures often were lower. In the Late Ordovician Period, CO2 concentrations were 12 times higher than they are today. The Late Ordovician Period was an ice age.
• Vostok (Antarctica) ice core samples indicate temperature changes have preceded changes in CO2 concentrations by an average of 800 years. This couldn't happen if CO2 caused temperature changes.
• CO2 in the atmosphere has increased since 1998, but temperatures haven't.

Now a peer-reviewed study of NASA satellite data indicates the computer models warmists rely upon grossly exaggerate the amount of heat being trapped in the atmosphere.

Mr. Gore's alarmist predictions have proved false. Polar ice caps are larger. So is the polar bear population (and the scientist upon whom Mr. Gore relied for his claim that the polar bear is endangered is facing accusations of scientific misconduct). The rise in sea levels -- which has been going on since the end of the last ice age -- is slowing down.

Mr. Gore can respond only with curses, and ever more hysterical predictions of imminent doom. His credibility is in tatters. In the public mind, he's gone from Nobel Prize winner to Chicken Little.

Anthropogenic (man-made) global warming is a "contrived phony mess that is falling apart of its own weight," said Texas Gov. Rick Perry, a candidate for president. It's the most harmful hoax in history, because President Barack Obama bases job-killing policies on it.

Thanks to the new technique of hydraulic fracturing (fracking), which makes it possible to recover oil and natural gas trapped in shale, the United States now has more reserves of oil, coal and natural gas than any other nation, concluded the Congressional Research Service.

"Shale gas doesn't change everything, it's much more important than that," said British energy expert Nick Grealy.

If these resources were exploited properly, America could be energy independent very soon. Millions of well-paying jobs would be created. New tax revenues would flood the Treasury. The cost of gasoline and electricity would plummet.

But the government forbids oil drilling in most of Alaska, most areas offshore and much of the West. Regulations proposed by the Environmental Protection Agency would destroy hundreds of thousands of jobs in the coal and electric power industries, and send electric bills soaring.

Mr. Obama's efforts to force Detroit to build electric cars consumers don't want (think a Chevette with a Cadillac price tag) may cost 220,000 jobs in the auto industry.

Our economically illiterate president prattles on about "green jobs." But so-called "renewables" require massive government subsidies to produce little energy. Studies in Spain, Britain and Italy indicate each subsidized "green" job costs, respectively, 2.2, 3.7 and 4.8 jobs in the private sector.

Industrial wind turbines -- a favorite of Mr. Obama's -- cause real environmental harm. Fossil fuels are persecuted for their alleged contributions to a phantom problem. To protect us from that phantom, President Obama is killing our economy.

Sunday, August 21, 2011

Khadafy Gone - One More Win for Obama

I wonder how much longer Assad will survive. The current American foreign policy is bearing fruit in a big way. The American partnership with NATO has been tested and ultimately succeeded - thanks much to the man in the White House.

Word Game

Did you know that, the words "race car" spelled backwards still spells
"race car"?

And that "eat" is the only word that, if you take the first letter and
move it to the last, spells its own past tense, "ate"?

And if you rearrange the letters in "Tea Party Republicans," and add just
a few more letters, it spells: "Shut the f*** up you free-loading,
progress-blocking, benefit-grabbing, resource-sucking, violent hypocrites,
and deal with the fact that you nearly wrecked the country under Bush and
that our president is black, so get over it."

Isn't that interesting?

Saturday, August 20, 2011

"the easiest thing we have to do is raise the debt ceiling"

The first 5 minutes are a devastating indictment of the Democratic party.

I sure am glad that the government had nothing to do with the housing crash.

It was just a lack of regulation, not an attempt to exert government influence over yet another area.  I mean obviously it was the banks fault, not the governemt controlled businesses which controlled over 50% (probably higher) of all mortages. 

And the solution?  Why more government influence!  That is the ticket!

Dobb-Frank (not the bill, the legislators)?  Their hands are clean, I mean they tried.


WASHINGTON (AP) -- The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices.

The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration.

The U.S. government rescued Fannie and Freddie in September 2008 and has funded them since the financial crisis. The mortgage giants own or guarantee about half of the nation's mortgages and nearly all new mortgages.

At the end of last month, the government owned roughly 248,000 foreclosed homes, officials said. About 70,000 of those are listed for sale. But officials expect the number of foreclosures to soar in the coming months.

Many foreclosures have been stalled so attorneys general and federal regulators can investigate whether lenders cut corners and improperly handled thousands of cases. Once a settlement is finalized, foreclosures are expected to pick up again and further depress home prices.

Converting the homes into rentals may reduce "credit losses and help stabilize neighborhoods and home values," said Edward DeMarco, acting director of the Federal Housing Finance Agency, which oversees Fannie and Freddie.

Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices of surrounding homes.

Really? No kidding? What a surprise!

Justshows how this administration was not just wasting its time on health care reform.  It wasted it's time on Green Jobs too!  And the drilling moratorium!  That helped.  I just can't understand how we got ourselves into this mess. 


Industrial Policy: The fact that President Obama's "green jobs" campaign has been an enormously expensive failure is now glaringly obvious.

The NY Times reports that "federal and state efforts to stimulate creation of green jobs have largely failed,  and that Obama's goal of 5 million new green jobs in 10 years is a "pipe dream."  For example, Obama's much-heralded weatherization program "never caught on."
California still has spent only about half its $186 million in federal weatherization funds, creating a grand total of 538 full-time jobs. He also points to the $59 million spent in California on green job training that resulted in just 719 placements. (As opposed to marginal tax rate cuts, which instituted instead of the "stimulus" would have us out of this mess by now)
Nearly three years into Obama's presidency (Three years!), the White House can't point to much solid evidence that significant numbers of Americans are scoring the green jobs the president has been touting. (No, but he can still blame Bush, the Arab Spring, and tax cuts from 10 years ago).
"Of course, we want to be part of the new innovation and green jobs," Rep. Maxine Waters, D-Calif., said recently. "But you know, the green jobs have been about a lot of talk, and not a lot has been happening on that."  (because Maxine you idiot Liberal/Socialist, you can't "government innovate".
The landscape is increasingly littered with failed "green" companies unable to survive in the marketplace even with huge government subsidies.  But the Obama administration still has its head buried under a pile of solar panels, with the president endlessly touring "clean" factories, pushing electric cars consumers don't want and talking about politically correct "jobs of the future."  (Let's hope one opens up in 2012)

Friday, August 19, 2011

Ready For Prime Time?

In his first week on the trail, Rick Perry has accused lifelong Republican (and GOP appointee) Ben Bernanke of potentially "playing politics" in a treasonous manner. The secessionist threatening governor has questioned the president's patriotism as well as that dang theory of evolution ("Its only a theory out there"). He doesn't believe in global warming - thinks there is a widespread conspiracy in the scientific community to lie on the subject in pursuit of research dollars and pounds. He thinks religion (Islam? Christianity? Buddhism?) should play a greater role in the public square while the federal government should be as inconsequential as possible.

So this is what has become of today's GOP? A gaffe prone half wit Texas governor (Jim Hightower says he puts the "guber in gubernatorial"), an IRS hating former IRS employee mole, and a one-term governor without an ounce of conviction (better than a half term governor, I suppose).

Abraham Lincoln must be rolling in his grave.

Wednesday, August 17, 2011

Taxes as a % of GDP?  A dumb preposition.  Because GDP in general increases, we will forever be locked into tax increases.

Taxes should be broad (inclusive) and as low as possible.  They should be enough to fund government, the size of government is the issue.

Medicare and S.S.?  Should they exist?


Now let's take a moment to remember the left's eternal protest about how Conservative never liked the "entitlements".  Well yes and no, when created there were warnings about how they would eventually break us...Hummmmm.  Not exactly outrageous.

A safety net is a good idea.  Obligating us to pay for life after 65 for every senior is not.

Folks who paid into S.S. deserve their $.  It would be better out of the government's hands and Bush's idea of private accounts sounds good.  It would also keep the legislators from stealing current contributions.

Medicare is another issue.  It, like private health care, needs to be consumer driven.  There are no cost constraints and there must be if the system is to survive.

funny Baxter, I/we have answered these questions many times before.  Not afraid.

What does not work is Socialism.  What does not work is class warfare.  What is not working is the economic management of our country by our Out Of His League President.

My solution?  Reduction of marginal tax rates.  Reduction of Capital Gains.  Repeal of Obamacare.

We would be better in a week.

And the laugher about the reduction of economic activity from the paltry spending reductions?

If we cut taxes and leave the $ in the economy, it will grow gangbusters and the deficit will go away and the economic activity of the government will be irrelevant.

He just can't help himself.

Obama just cannot get a clue.  He is STILL talking about fricking infrastructure, like building bridges will help create long term economic growth.  He just can't leave the rich alone, as if that is what is necessary to rebuild our economy.

He is wrong, but he is a true believer in socialism.  He truly thinks class warfare and public works are the solution to our national economic emergency.

And mark my words, things are going to get worse.

A Democrat was on the air today, he blamed the Rep. congress for not letting the Dem's spend 3 trillion on the stimulus and blamed them for standing firm on the debt ceiling issue.

If the stimulus worked, it would have worked.

Greatest fallacy of my life #1, the government throwing money at the economy helps prevent deflation (how are those home prices doing?) and #2 there is a government multiplier.

We have said for a long time, let people keep more of their money and let them be free and we will be OK.  We are in a government created mess and we keep adding fuel to the fire.

Tort reform
Balance the budget
Lower taxes
Remove regulation
Enforce the law.

1 month after the above, we start growing.

It is that simple.

Getting to Know the Tea Party

Monday, August 15, 2011

Waste of time

Mr. Buffett is wrong and distracting from the "issue".  By focusing the public's attention on such and inconsequential matter, it allows our Legislators to engage in demagoguery and not deal with our main problem, entitlements.  We cannot tax our way out of this mess.  This is a very pertinent article, but wrong.

If one does the math on his allegations (and there is a lot of "mixing" of capital gains vs. income taxes) we are talking about....billions, not the trillions needed to address our problems.
this allows our President to waste our time talking about corporate jets, when the real problem is Medicare and S. S.   
OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.
I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.
Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.
The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)
I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.
Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.
Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

Saturday, August 13, 2011

Rick Perry

I listened to Perry make his announcement speech.  He is not shy about his Conservatism and speaks to me.  He spoke directly about the insult of having 50% of the population pay no taxes and pledged to make the Government as inconsequential in my life as practicable. 

He is the opposite of Obama.  He is not like Bush, while both are from Texas, Perry is more brazen and cocky.  He is also the anti Romney, not especially polished, and definitely not compromising.

It is not unreasonable to believe that both might be on the ticket, I think today, Perry on top.

It would be one hell of a race.  The polar opposites of candidates, with polar opposites of vision.

The country would chose between American Capitalism or European Socialism.

It will depend on how many of the 50% non tax payers vote.

Our future will hang in the balance.

The spell that Mr. Obama once cast—a spell so powerful that instead of ridiculing him when he boasted that he would cause "the oceans to stop rising and the planet to heal," all of liberaldom fell into a delirious swoon—has now been broken by its traumatic realization that he is neither the "god" Newsweek in all seriousness declared him to be nor even a messianic deliverer.
Hence the question on every lip is—as the title of a much quoted article in the New York Times by Drew Westen of Emory University puts it— "What Happened to Obama?" Attacking from the left, Mr. Westin charges that President Obama has been conciliatory when he should have been aggressively pounding away at all the evildoers on the right.

Of course, unlike Mr. Westen, we villainous conservatives do not see Mr. Obama as conciliatory or as "a president who either does not know what he believes or is willing to take whatever position he thinks will lead to his re-election." On the contrary, we see him as a president who knows all too well what he believes. Furthermore, what Mr. Westen regards as an opportunistic appeal to the center we interpret as a tactic calculated to obfuscate his unshakable strategic objective, which is to turn this country into a European-style social democracy while diminishing the leading role it has played in the world since the end of World War II. The Democrats have persistently denied that these are Mr. Obama's goals, but they have only been able to do so by ignoring or dismissing what Mr. Obama himself, in a rare moment of candor, promised at the tail end of his run for the presidency: "We are five days away from fundamentally transforming the United States of America."

This statement, coming on top of his association with radicals like Bill Ayers, Jeremiah Wright and Rashid Khalidi, definitively revealed to all who were not wilfully blinding themselves that Mr. Obama was a genuine product of the political culture that had its birth among a marginal group of leftists in the early 1960s and that by the end of the decade had spread metastatically to the universities, the mainstream media, the mainline churches, and the entertainment industry. Like their communist ancestors of the 1930s, the leftist radicals of the '60s were convinced that the United States was so rotten that only a revolution could save it.

But whereas the communists had in their delusional vision of the Soviet Union a model of the kind of society that would replace the one they were bent on destroying, the new leftists only knew what they were against: America, or Amerika as they spelled it to suggest its kinship to Nazi Germany. Thanks, however, to the unmasking of the Soviet Union as a totalitarian nightmare, they did not know what they were for. Yet once they had pulled off the incredible feat of taking over the Democratic Party behind the presidential candidacy of George McGovern in 1972, they dropped the vain hope of a revolution, and in the social-democratic system most fully developed in Sweden they found an alternative to American capitalism that had a realistic possibility of being achieved through gradual political reform.

Despite Mr. McGovern's defeat by Richard Nixon in a landslide, the leftists remained a powerful force within the Democratic Party, but for the next three decades the electoral exigencies within which they had chosen to operate prevented them from getting their own man nominated. Thus, not one of the six Democratic presidential candidates who followed Mr. McGovern came out of the party's left wing, and when Jimmy Carter and Bill Clinton (the only two of the six who won) tried each in his own way to govern in its spirit, their policies were rejected by the American immune system. It was only with the advent of Barack Obama that the leftists at long last succeeded in nominating one of their own.

To be sure, no white candidate who had close associations with an outspoken hater of America like Jeremiah Wright and an unrepentant terrorist like Bill Ayers would have lasted a single day. But because Mr. Obama was black, and therefore entitled in the eyes of liberaldom to have hung out with protesters against various American injustices, even if they were a bit extreme, he was given a pass. And in any case, what did such ancient history matter when he was also articulate and elegant and (as he himself had said) "non-threatening," all of which gave him a fighting chance to become the first black president and thereby to lay the curse of racism to rest?

And so it came about that a faithful scion of the political culture of the '60s left is now sitting in the White House and doing everything in his power to effect the fundamental transformation of America to which that culture was dedicated and to which he has pledged his own personal allegiance.

My own answer to the question, "What Happened to Obama?" is that nothing happened to him. He is still the same anti-American leftist he was before becoming our president, and it is this rather than inexperience or incompetence or weakness or stupidity that accounts for the richly deserved failure both at home and abroad of the policies stemming from that reprehensible cast of mind.
On a TV show the other day an affable liberal argued that what Obama needed to do was pass another trillion-dollar – or, better yet, multi-trillion – stimulus. I think not. The London rioters are the children of dependency, the progeny of Big Government: they have been marinated in "stimulus" their entire lives."A man of 21 with learning disabilities has been granted taxpayers' money to fly to Amsterdam and have sex with a prostitute."

While the British Treasury is busy writing checks to Amsterdam prostitutes, one-fifth of children are raised in homes in which no adult works – in which the weekday ritual of rising, dressing and leaving for gainful employment is entirely unknown. One-tenth of the adult population has done not a day's work since Tony Blair took office on May 1, 1997.
If you were born into such a household, you've been comprehensively "stimulated" into the dead-eyed zombies staggering about the streets this past week: pathetic inarticulate subhumans unable even to grunt the minimal monosyllables to BBC interviewers.  The great-grandparents of these brutes stood alone against a Fascist Europe in that dark year after the fall of France in 1940. Their grandparents were raised in one of the most peaceful and crime-free nations on the planet. Were those Englishmen of the mid-20th century to be magically transplanted to London today, they'd assume they were in some fantastical remote galaxy.

This is the logical dead end of the Nanny State. When William Beveridge laid out his blueprint for the British welfare regime in 1942, his goal was the "abolition of want" to be accomplished by "co-operation between the State and the individual." In attempting to insulate the citizenry from life's vicissitudes, Sir William succeeded beyond his wildest dreams. As I write in my book: "Want has been all but abolished. Today, fewer and fewer Britons want to work, want to marry, want to raise children, want to lead a life of any purpose or dignity." The United Kingdom has the highest drug use in Europe, the highest incidence of sexually transmitted disease, the highest number of single mothers, the highest abortion rate. Marriage is all but defunct, except for William and Kate, fellow toffs, upscale gays and Muslims. From page 204: "For Americans, the quickest way to understand modern Britain is to look at what LBJ's Great Society did to the black family and imagine it applied to the general population."

Wednesday, August 10, 2011

We Will Get a Grand Bargain This Year

John Boehner just picked his three members of the super committee; Jeb Hensarling (R-TX), Dave Camp (R-MI), and Fred Upton (R-MI). These selections suggest an honest, good faith effort to come to a bipartisan agreement. Harry Reid appointed a good group earlier that will try to find common ground.

McConnell has suggested that his picks will all be on the far right. We'll see. Thanks to Boehner and Reid, Pelosi and McConnell can both pick hard partisans and 7 or 8 votes (of 12) on a centrist plan will still be well within reach.

It was about time for some good news.

Monday, August 8, 2011

What I Would Have Said Today

The president came out and said nothing new. He needed a bold proposal to change the dynamic and put the onus on Congress:

1> The Super-Committee in Congress should find $4 trillion more in savings, rather than the agreed upon $1.5 trillion, for a total of $5 trillion in deficit reduction over 10 years.

2> If we had come to the $4 trillion grand bargain that I advocated in discussions, we would not have been downgraded by S&P and we would not have lost trillions of dollars in asset values over the past week. We'd have probably had a rally. Perhaps, you should call your member of Congress.

3> With my proposed $5 trillion in savings over 10 years, we can afford $1 trillion of infrastructure stimulus over the next two years. The economy has slowed, in part, as our successful stimulus plan concluded. We need to add more stimulus to the economy until the recovery achieves sufficient momentum to grow on it's own. We have not had a recovery in the past 60 years that did not include stimulus spending.

Sunday, August 7, 2011

60% od the debt due to Bush Tax cuts!

Dick Cheney once said " Reagan proved that deficits don't matter" But of course Reagan raised taxes during his administration, and raised the debt limit. The theory now is cut taxes so that way the government doesn't have too much money to spend. So cutting taxes increases revenue right!
Or is it cutting taxes decreases revenue, I am confused. If the economy is too good we have too much of the peoples money so let's cut taxes, and if the economy is bad we have to cut taxes also, well which is it, or is simply let's cut taxes because I don' know what it does, raise revenue or decrease revenue, but I know cutting taxes is the answer?
This theory of cutting taxes can't have it both ways. Bush said cut taxes we have too much of the peoples money because the economy was doing too well, so he cut taxes and now he hands off to Obama a 1.2 trillion debt, and Obama has not raised taxes and now we have a much larger debt.
But the answer from the tea party is cut taxes more because the economy is doing bad. I know I only have a BS degree in college so I will leave it up to Dr. Jim to explain which is it!

Friday, August 5, 2011

We Deserve It

S&P downgraded the US credit rating today to AA+ after the markets closed. Clearly, we deserve it. Reading the comments contained in the downgrade, they are about as concerned with the political environment and the brinksmanship regarding our obligations as they are with the numbers. This is the first of many rewards sure to come for the craziness in our capitol that is welcomed by some.

Again, we deserve it. We have the lowest relative revenues in 60 years and one party - the one that ran up the debt - has pledged to leave revenues alone. That single fact should bring our rating down at least one notch all by itself. There are elements in the Democratic Party that are opposing any meaningful change to entitlements - an utterly unsustainable position. This is yet another wake up call for both parties to get it together and time is NOT on our side. We can solve this problem right now on our own terms. As each day passes, it becomes more likely that we will need to dance to the tune of our creditors.

We need to get on a path to bring federal receipts to 22% +/- and spending to 20% +/- in no more than a decade. As Bill Clinton might ask, whats not to like about balancing budgets, producing surpluses and paying down the debt?

Peggy nails it

There was drama at the White House this week when a man tried to hurl himself over the fence. But the Secret Service intervened and talked the president into going back inside and finishing his term.
That's from Conan O'Brien's monologue the other night. It captures the moment pretty well. Mr. Obama's poll numbers continue to fall, his position in the battleground states to deteriorate. From Politico: "Obama emerges from the months-long [debt ceiling] fracas weaker—and facing much deeper and more durable political obstacles—than his own advisers ever imagined." The president seemed to admit as much when he met with supporters at a fund-raiser in Chicago. "When I said 'Change we can believe in,' I didn't say, 'Change we can believe in tomorrow.' Not 'Change we can believe in next week.' We knew this was going to take time." When presidents talk like that, they're saying: This isn't working.

One fact emerged rather starkly during the crisis, and it will likely have implications in the coming year. It is that the president misunderstands himself as a political figure. Specifically, he misunderstands his rhetorical powers. He thinks they are huge. They are not. They are limited.  His conviction led to an interesting historic moment, and certainly a dramatic one, during the debt ceiling negotiations.
It was late Wednesday afternoon, July 13, in the Cabinet Room in the White House. Budget negotiations between Democrats and Republicans had been going on for months. The president, the vice president and congressional leaders on both sides were meeting again. Late in the meeting, House Majority Leader Eric Cantor asked the president a question. As Mr. Cantor told it this week, he was thinking about how the White House and the Republicans were still far apart on the size of budget cuts. He felt the president and his party were hung up on an insistence on raising taxes. Mr. Cantor asked Mr. Obama if he would drop his stand that the debt ceiling should be raised without dollar-for-dollar cuts. At that point, said Mr. Cantor, the president "turned to me and said, 'Eric, don't call my bluff.' He said, 'I'm going to take this to the American people.'" Then he got up and left.

The president was confident he could go over the heads of the opposition and win the day with his powers of persuasion. On July 25 he made his move, with a prime-time national address.

Boy, did it not work.

It was a speech with a calm surface but a rough undertow. "The wealthiest Americans" and "biggest corporations" should "give up some of their breaks." The "burden" must be "fairly shared." The problem is Republicans, who are "insisting" on an approach that "doesn't ask the wealthiest Americans or the biggest corporations to contribute anything at all." These Republicans ask nothing of "those at the top of the income scale." Their stand would "threaten working families" and enrich the "corporate jet owner," the "oil companies" and "hedge fund managers." But don't worry, "the 98% of Americans who make under $250,000 would see no tax increases at all." "Millionaires and billionaires" must "share in the sacrifice." Otherwise the government may not be able to send out Social Security checks.

It was, obviously, an attempt at class warfare. But class warfare is inherently manipulative, and people often sense manipulation and lean away from it. Americans at this point—they've been through the 20th century—don't like attempts to divide them. It turns things sour.

Beyond that, it was the kind of appeal Americans would only begin to consider if the person making it had a lot of personal trust built up in the credibility bank. People have to believe you're genuine in your anxiety for your country, that you're working in good faith with the other party, that you're not using a crisis for political gain, that you genuinely mean well toward all, including even the wealthy, that you are shrewd and wise in your choice of a path. Mr. Obama doesn't have that kind of trust. How many people think he's broad-gauged, genuine, knowing, or that his judgment on political issues is superior?

So the big speech went nowhere. It moved the dial nowhere but down. The president's poll numbers continued to fall. And soon the White House put up a white flag and dropped the insistence on tax increases, and Democrats and Republicans came up with a bill that finally passed both houses.

The July 25 speech was of a piece with most of the president's rhetorical leadership through the debt ceiling crisis. Some of his statements were patronizing: We have to "eat our peas." He was boring in the way that people who are essentially ideological are always boring. They bleed any realness out of their arguments. They are immersed in abstractions that get reduced to platitudes, and so they never seem to be telling it straight. And he was a joy-free zone. No matter how much the president tries to smile, and he has a lovely smile, one is always aware of his grim task: income equality, redistribution, taxes. Come, let us suffer together

But the president is supposed to be great at speeches. Why isn't it working anymore? One answer is that it never "worked." The power of the president's oratory was always exaggerated. It is true that a good speech put him on the map in 2004 and made his rise possible, and true he gave some good speeches in 2008. But people didn't really vote for him because he said did things like: "This was the moment when the rise of the oceans began to slow and our planet began to heal." They voted for him in spite of that. They voted for him for other reasons.
The president has been obsessing on Ronald Reagan the past few months, referring to him in private and attempting to use him to buttress his position in public. They say Republicans can't get over Reagan, but really it's Democrats who aren't over him, and who draw the wrong lessons from his success. Reagan himself never bragged about his ability to convince the American people. He'd never point a finger and say: "I'll go to the people and grind you to dust." He thought speaking was a big part of leadership, but only part, and in his farewell address he went out of his way to say he never thought of himself as a great communicator. He thought he simply communicated great things—essentially, the vision of the founders as applied to current circumstances.
Democrats were sure Reagan was wrong, so they explained his success to themselves by believing that it all came down to some kind of magical formula involving his inexplicably powerful speeches. They misdefined his powers and saddled themselves with an unrealistic faith in the power of speaking.
But speeches aren't magic. A speech is only as good as the ideas it advances. Reagan had good ideas. Obama does not.
The debt ceiling crisis revealed Mr. Obama's speeches as rhetorical kryptonite. It is the substance that repels the listener.
Federal Budget 101

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000

Federal budget: $3,820,000,000,000

New debt: $ 1,650,000,000,000

National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.
Total annual income for the Jones family: $21,700

Amount of money the Jones family spent: $38,200

Amount of new debt added to the credit card: $16,500

Outstanding balance on the credit card: $142,710

Amount cut from the budget: $385

So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending?

It is a start, although hardly a solution.

Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt).

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state.

To effect budget change, we need to change the job description and give Congress new marching orders.

It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now.

In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicteto the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.

Wednesday, August 3, 2011

U.S. Economy Needs a New Business Model

The U.S. business model is broken.

One doesn't often hear talk of a "business model" for the sprawling, diverse, market-driven U.S. economy. But—sometimes explicitly, sometimes implicitly—there is an economic-growth strategy that underlies government policy, investor bets and business and consumer behavior.


A man stands outside a store advertising that it is going out of business in New York in July.

Ours isn't working. Two years after the economy turned from contracting to expanding, output still hasn't returned to prerecession levels. We're still 10 million jobs short of full employment, and the fraction of adults at work, 58.2%, is at a 28-year low. The latest bad economic data have proved this isn't the typical recovery, sparked fears of a double-dip recession and reinforced the case that old drivers won't power future growth.

Paul Romer, a New York University economist who has spent his career thinking about economic growth, calls this time the "Great Distress," a period of pain that he predicts will last five or even 10 years.

As Austan Goolsbee, the president's departing economic adviser, argues, the U.S. shouldn't aspire to return to the national business model of the past decade in which debt-fueled consumer spending and a housing bubble drove the economy. "We can't just go back to what we were doing in the 2000s," he said.

He prescribes a recovery "fueled by business investment, by export growth, by innovation." Sounds good, but how do we get that?

Lurking beneath this week's congressional debate were two alternatives. To oversimplify a bit, they go like this:

One view is that if the government steps back, the private sector will step forward. "We want to create jobs, and the best way to do that is to stop taking money out of the private sector, stop overtaxing the people in this country, leave that money in the private sector and allow it to be used to create jobs," said Rep. Virginia Foxx (R., N.C.). The slogan: no tax increases.

The alternative view is that the private sector is working only for a thin layer of winners at the top; government should play Robin Hood. "Tax cuts do not...create jobs," said Rep. Barbara Lee (D., Calif.). "When we do not ask the super rich and the corporations who make billions of dollars of profits off of the American economy, we will not have the funds to keep that engine make sure that we can meet our nation's obligations to our seniors, our children and our poor." The slogan: no Medicare, Medicaid or Social Security cuts.

The usual columnist's device at this point is to criticize both views and segue to a wise alternative. That's not my intent. The facts don't favor the case that big government is crowding out the private sector now: There is so much unused capacity, so many idle workers, so much low-interest credit available to big companies. And the facts show the gap between winners and losers in the economy has been widening for the past few decades.

But the congressional debate did miss something. Two big sectors of the U.S. economy have been on steroids: finance and health care. If anything is crowding out more productive activities, it's them, as Mr. Romer argued in a recent National Academy of Sciences lecture.

The bloated financial sector—all those brains lured by big bucks who might otherwise have been employed in science, software, engineering or other fields—has harmed the U.S. economy more than any of our post-World War II communist adversaries did. The American health system costs more per person than any other, but isn't delivering the world's healthiest people. The U.S. isn't getting its money's worth from either sector.

Why have they grown so big? Mr. Romer has a theory: Profit-seeking players in finance and health care have captured Congress, resisted regulation that would curb their excesses and exploited antiquated rules and policy for private gain. "The legislative process may just be too vulnerable to manipulation by very well-financed entities with an enormous amount of wealth and income at stake," he said. "Congress is for sale at bargain-basement prices."

His solution: Congress should tie its own hands more often, retaining power to investigate and vote proposals up or down but avoiding the detailed crafting of legislative provisions that influence the flow of money. In other words, he wants more bodies such as the Base Closure and Realignment Commission (to decide which military bases to close), the Independent Payment Advisory Board (to identify ways Medicare can save money) and, perhaps, the new Joint Select Committee on Deficit Reduction (to find $1.5 trillion in deficit-reduction cuts).

Maybe that's an answer. But it's clear that future prosperity depends on the U.S.—its government, business, people and universities—coalescing behind a strategy for growth and creating incentives so talent and capital flow to promising sectors where the U.S. still has an edge in an increasingly competitive global economy.

Working Together Stops at the Insane Asylum

A wonderful conspiracy between so-called Progressives (I favor the term Redistributionists) and the Main Stream Media is that the Tea Party supporters are irresponsible because they refuse to compromise.

Let me ask you, who's crazy? Is it the freshmen congressmen who refuse to sustain the behavior of recent administrations (Bush included) who have us borrowing 42 cents of of every dollar we spend? FORTY TWO CENTS OF EVERY DOLLAR WE SPEND!?!?!?! Or is it the Redistributionists who would sustain that behavior? It is crazy to keep digging when we are in such a deep hole. CRAZY!!!!

The Tea Partyers need apologize for nothing. There is no wisdom nor common sense in compromising with crazy people. Crazy people need to be restrained, and that is what has happen, but only in small measure.

Not one line item has been eliminated from a bloated, ineffective government structure.

There were no cuts. NONE! There were only reductions in forecast growth. HOW CRAZY IS THAT!!!

The first so-called cut does not occur until November of 2012. We have a 1.5 trillion deficit, and the first actual change in forecast spending does not occur for 15 months. THAT IS CRAZY!!!

Very little actually happened. The reaction by the Redistributionists (the real crazy people) and their MSM enablers shows that they are either crazy or simply lying in order to appeal to their base. In the USA we call that behavior politics. It is much worse than that.

I hope the Republicans embrace the Tea Party message because it is a message straight from the middle class, and the middle class is getting killed. Redistributionist policies take from the rich (66% of the budget is now transfer payments of one kind or another) and give to the poor. Too bad for the middle class. $2.2 trillion just isn't enough for the Redistributionists. They need to borrow another $1.5 trillion to promote their agenda. The Republicans need to aggressively promote the welfare of the middle class, and that is best done through capitalism because capitalism creates jobs. Government does not create jobs. Government does not create wealth.

Obama's administration has aggressively pursued an anti-growth agenda through oppressive regulation. We do need regulation. Greed can't be trusted. But we could be producing much more oil and gas, which Obama's administration continues to block. Dodd-Frank has shackled banks, particularly small banks and that has put a stranglehold on their ability to lend. The EPA wants to raise the bar higher at a time when the need for jobs outweighs the need for incremental gains in pollution control. And the NLRB is promoting unions at the expense of job growth and workers rights (do you believe in secret ballots? Do you believe that failing to vote in an election should be construed to allow a minority to control the majority?).

Obama's administration is aggressively pursuing an anti-jobs agenda when unemployment is our biggest societal problem.

So, I ask you: Who's crazy?

All the best,


Tuesday, August 2, 2011

We are in a mess and none of this gibberish will address any of it.

The stock market dropped 100 points during this useless, class warfare speech.  He has no clue.

OBAMA: Since you can't close the deficit with just spending cuts, we'll need a balanced approach where everything's on the table.
Yes, that means making some adjustments to protect health care programs like Medicare so they're there for future generations.  It also means reforming our tax code so that the wealthiest Americans and biggest corporations pay their fair share. And it means getting rid of taxpayer subsidies to oil and gas companies and tax loopholes that help billionaires pay a lower tax rate than teachers and nurses.  I've said it before, I will say it again, we can't balance the budget on the backs of the very people who have borne the biggest brunt of this recession.   We can't make it tougher for young people to go to college or ask seniors to pay more for health care or ask scientists to give up on promising medical research because we couldn't close a tax shelter for the most fortunate among us. Everyone's gonna have to chip in. That's only fair. That's the principle I'll be fighting for during the next phase of this process.   And in the coming months I'll continue also to fight for what the American people care about most: new jobs, higher wages and faster economic growth

Central Falls, Rhode Island, one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession, filed for a rare Chapter 9 bankruptcy on Monday.

The bankruptcy filing, a risky and potentially expensive move that could freeze the city out of the U.S. municipal bond market, marks a symbolic blow as state and local governments struggle to pull themselves out of the recession.

The smallest city in the smallest U.S. state made the filing as it grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million.

"This is a wake-up call for other struggling towns," said Eileen Norcross, a senior research fellow at the Mercatus Center at George Mason University. "States should be looking at Rhode Island and saying, 'How can we avoid this?"

Still, dire predictions of mass municipal defaults made late last year by Wall Street analyst Meredith Whitney have not come to pass. A string of failures could rattle the $2.9 trillion U.S. municipal debt market


During the Obama campaign, one of his oft spoken themes was " We are not red states and blue states , we are the United States."
Well ! I think this debt crisis showed us all that we are blue states are red states and not the United States. And one of the big problems Obama has failed to recognize since taking office is exactly that.
The people who do not agree with Obama are not willing to work together, they are "take it to the edge and over." The fact that these tea party people were willing to push the American economy over the cliff, and cost the average American thousands of dollars, is proof that nothing matters except their agenda.
Obama wake up these are not work together people, they are "their way or the highway" people, look at Health Care, did they come around and work together or did they just obstruct.
Obama stop being naive, this is not a community organizer (bring community together) job.
This is about power Washington power, and you better learn quick these people are out to destroy you.
Before you all comment, let's be clear, there is nothing wrong with having principals and not compromising them, but you were elected to get things done for the American people and that alone means not getting your way all the time, and raising the debt limit is a Washington pastime done year after year. Anything else is politics pure and simple.