[an excellent question...a
gold star for Charlie Rose]
Larry Summers, the
president’s economic adviser, and Mike Bloomberg, the mayor of New York,
shared a stage in Washington Friday. Although they agreed on most things, Summers
was quick to swat down Bloomberg’s suggestions that disclosure —
as opposed to more muscular regulation, particularly of financial offerings
to consumers — could cure much of what is wrong with the financial
sector.
Whenever something
happens, Summers said, Plan A is form a committee. Plan B is to encourage
industry to voluntarily devise better practices. Plan C is to call for more
transparency. And then, eventually, Plan D is “do something.”
The audience, convened
by the Hamilton Project and Center for American Progress, laughed.Then
moderator Charlie Rose, the TV talk show host, intervened: Is that how
you’d describe the president’s commission to ponder the federal
budget deficit?
Summers was, uncharacteristically,
speechless.
4/30/2010:
A great part of that order which reigns among mankind is not the effect of government.
It had its origin in the principles of society and the natural constitution
of man. It existed prior to government, and would exist if the formality of
government was abolished. The mutual dependence and reciprocal interest which
man has upon man, and all parts of a civilized community upon each other,
create that great chain of connection which holds it together. The
landholder, the farmer, the manufacturer, the merchant, the tradesman, and
every occupation, prospers by the aid which each receives from the other, and
from the whole. Common interest regulates their concerns, and forms their
laws; and the laws which common usage ordains, have a greater influence than
the laws of government. In fine, society performs for itself almost every
thing which is ascribed to government. — Thomas Paine, The Rights of
Man [1791-1792]
For decades, public sector unions have
peddled the fantasy that government employees were paid less than their
counterparts in the private sector. In fact, the pay disparity is the other
way around. Government workers, especially at the federal level, make salaries
that are scandalously higher than those paid to private sector workers. And
let's not forget private sector workers not only have to be sufficiently
productive to earn their paychecks, they also must pay the taxes that support
the more generous jobs in the public sector.
Data compiled by the Commerce Department's
Bureau of Economic Analysis reveals the extent of the pay gap between federal
and private workers. As of 2008, the average federal salary was $119,982,
compared with $59,909 for the average private sector employee. In other
words, the average federal bureaucrat makes twice as much as the average
working taxpayer. Add the value of benefits like health care and pensions,
and the gap grows even bigger. The average federal employee's benefits add $40,785
to his annual total compensation, whereas the average working taxpayer's
benefits increase his total compensation by only $9,881. In other words,
federal workers are paid on average salaries that are twice as generous as
those in the private sector, and they receive benefits that are four times
greater.
The situation is the same when state and
local government compensation data is compared with that of the private
sector. As the Cato Institute's Chris Edwards notes in the current issue of
the Cato Journal, "The public sector pay advantage is most pronounced in
benefits. Bureau of Economic Analysis data show that average compensation in
the private sector was $59,909 in 2008, including $50,028 in wages and $9,881
in benefits. Average compensation in the public sector was $67,812, including
$52,051 in wages and $15,761 in benefits." Those figures likely
underestimate the true gap on the benefits side because the typical
government employee gets a guaranteed defined benefit pension under very
generous terms, while the private sector norm is a 401(K) defined
contribution plan that is subject to the ups and downs of the economy.
With the federal deficit and national debt
heading into the stratosphere, taxpayers can no longer afford to support such
lucrative government compensation. Public sector pay and benefits at all
levels should be reduced to make it comparable to the wages and benefits
earned by the average working taxpayer. The first politician to propose a
five-year plan for this purpose is likely to be cheered mightily by
taxpayers.
Clinton
says, “I’m not at all sure they violated the law...but I do
believe that there was no underlying merit to the transaction.”
(source: C-SPAN) [an unusually frank comment by former president Bill
Clinton]
4/28/2010: Salt
Tyrants by Walter E. Williams
Here’s how my June 14, 2006 column started: “Down through
the years, I’ve attempted to warn my fellow Americans about the tyrannical
precedent and template for further tyranny set by anti-tobacco zealots. ...
In the early stages of the anti-tobacco campaign, there were calls for
“reasonable” measures such as non-smoking sections on airplanes
and health warnings on cigarette packs. In the 1970s, no one would have ever
believed such measures would have evolved into today’s level of attack
on smokers, which includes confiscatory cigarette taxes and bans on outdoor
smoking. The door was opened, and the zealots took over.”
What the anti-tobacco zealots established is that government had the
right to forcibly control our lives if it was done in the name of protecting
our health. In the Foundation for Economic Education’s Freeman
publication, I wrote a column titled “Nazi Tactics” (January
2003): “These people who want to control our lives are almost finished
with smokers; but never in history has a tyrant arisen one day and decided to
tyrannize no more. The nation’s tyrants have now turned their attention
to the vilification of fast food chains such as McDonald’s, Burger
King, Wendy’s and Kentucky Fried Chicken, charging them with having
created an addiction to fatty foods. ... In their campaign against fast food
chains, restaurants and soda and candy manufacturers the nation’s food
Nazis always refer to the anti-tobacco campaign as the model for their
agenda.”
America’s tyrants have now turned their attention to salt, as
reported in the Washington Post’s article “FDA plans to limit
amount of salt allowed in processed foods for health reasons” (April
19, 2010). Why do food processors put a certain quantity of salt in their
products? The answer is the people who buy their product like it and they
earn profits by pleasing customers. The FDA has taken the position that what the
American buying public wants is irrelevant. They know what’s best and
if you disagree, they will fine, jail or put you out of business.
Tyranny knows no bounds. Let’s say that the FDA orders
Stouffer’s to no longer put 970 mg of sodium in their roasted turkey dinner;
they mandate a maximum of 400 mg. Suppose Stouffer’s customers,
assuming they continue buying the product, add more salt -- what will the FDA
do? The answer is easy. They will copy the successful anti-tobacco zealot
template. They might start out with warning labels on salt. Congress will
levy confiscatory taxes on salt. Maybe lawsuits will be brought against salt
companies. State and local agencies might deny child adoption rights to
couples found using too much salt. Before a couple can adopt a baby, they
would have to take a blood test to determine their dietary habits. Teachers
might ask schoolchildren to report their parents for adding salt to their
meals. You might say, “Williams, they’d never go that far in the
name of health.” In 1960, you might have said the same thing about
tobacco zealots but yet they’ve done the same and more.
The late H.L. Mencken’s description of health care professionals
in his day is just as appropriate for many of today’s: “A certain
section of medical opinion, in late years, has succumbed to the messianic
delusion. Its spokesmen are not content to deal with the patients who come to
them for advice; they conceive it to be their duty to force their advice upon
everyone, including especially those who don’t want it. That duty is
purely imaginary. It is born of vanity, not of public spirit. The impulse
behind it is not altruism, but a mere yearning to run things.”
Thomas Jefferson put it simpler in his Notes on Religion in 1776,
“Laws provide against injury from others, but not from
ourselves.”
Many years ago, I was
surprised to receive a letter from an old friend, saying that she had been
told that I refused to see campus visitors from Africa. At the time, I was so
bogged down with work that I had agreed to see only one visitor to the
Stanford campus— and it so happens that he was from Africa. He just
happened to come along when I had a little breathing room from the work I was
doing in my office.
I pointed out to my friend
that whoever said what she heard might just as well have said that I refused
to go sky-diving with blacks— which was true, because I refused to go
sky-diving with anybody, whether black, white, Asian or whatever.
The kind of thinking that
produced a passing misconception about me has, unfortunately, produced much
bigger, much longer lasting, much more systematic and more poisonous
distortions about the United States of America.
Slavery is a classic
example. The history of slavery across the centuries and in many countries
around the world is a painful history to read— not only in terms of how
slaves have been treated, but because of what that says about the whole human
species— because slaves and enslavers alike have been of every race,
religion and nationality.
If the history of slavery ought to teach us
anything, it is that human beings cannot be trusted with unbridled power over
other human beings— no matter what color or creed any of them are. The
history of ancient despotism and modern totalitarianism practically shouts
that same message from the blood-stained pages of history.
But that is not the
message that is being taught in our schools and colleges, or dramatized on
television and in the movies. The message that is pounded home again and
again is that white people enslaved black people.
It is true, just as it is
true that I don’t go sky-diving with blacks. But it is also false in
its implications for the same reason. Just as Europeans enslaved Africans,
North Africans enslaved Europeans— more Europeans than there were
Africans enslaved in the United States and in the 13 colonies from which it
was formed.
The treatment of white
galley slaves was even worse than the treatment of black slaves picking
cotton.
But there are no movies or
television dramas about it comparable to “Roots,” and our schools
and colleges don’t pound it into the heads of students.
The inhumanity of human
beings toward other human beings is not a new story, much less a local story.
There is no need to hide it, because there are lessons we can learn from it.
But there is also no need to distort it, so that sins of the whole human
species around the world are presented as special defects of “our
society” or the sins of a particular race.
If American society and
Western civilization are different from other societies and civilization, it
is that they eventually turned against slavery, and stamped it out, at a time
when non-Western societies around the world were still maintaining slavery
and resisting Western pressures to end slavery, including in some cases armed
resistance.
Only the fact that the
West had more firepower than others put an end to slavery in many non-Western
societies during the age of Western imperialism. Yet today there are
Americans who have gone to Africa to apologize for slavery— on a
continent where slavery has still not been completely ended, to this very
moment.
It is not just the history
of slavery that gets distorted beyond recognition by the selective filtering
of facts. Those who go back to mine history, in order to find everything they
can to undermine American society or Western civilization, have very little
interest in the Bataan death march, the atrocities of the Ottoman Empire or
similar atrocities in other times and places.
Those who mine history for
sins are not searching for truth but for opportunities to denigrate their own
society, or for grievances that can be cashed in today, at the expense of
people who were not even born when the sins of the past were committed.
An ancient adage says:
“Sufficient for the day is the evil thereof.” But apparently that
is not sufficient for many among our educators, the intelligentsia or the
media. They are busy poisoning the present by the way they present the past.
To find out more about
Thomas Sowell and read features by other Creators Syndicate columnists and
cartoonists, visit the Creators Syndicate web page at www.creators.com.
Thomas Sowell is a senior fellow at the Hoover Institution, Stanford
University, Stanford, CA 94305. His Web site is www.tsowell.com.
When
President Obama was a candidate, he pledged over and over to voters: If you
make less than $250,000 a year, your taxes will not go up. Voters read his
lips. They hoped for change.
Yesterday,
the President said that the Value Added Tax is “on the table.”
That means it will be the main course served up after the November elections.
After ramming through his ObamaCare bill on the narrowest of partisan margins
last month, the President is finding that it’s going to be impossible
to deliver on that massive new entitlement without hefty additional taxes.
That’s why he’s enlisted “go along to get along”
types like Erskine Bowles and Alan Simpson--men who will never have to face
the voters’ wrath--to stitch a fig leaf for an after-November major tax
hike.
Margaret
Thatcher used to say the problem with socialism is that soon you run out of
other people’s money. The European socialism that is the
President’s program will require a substantial increase in the already
worrisome tax burden.
Last
week, Mr. Obama scoffed at the TEA Party rallies on tax day.
“You’d think they’d be saying ‘thank
you,’” he told a fundraiser for embattled Sen. Barbara Boxer. TEA
partygoers were not amused. Their title comes from the slogan: “Taxed
Enough Already--TEA.” TEA partygoers know what the rest of the
electorate is just finding out: the European-style social welfare system
Obama wants cannot be supported without vast increases in revenue at every
level of production. Of course, double-digit unemployment has also become a
staple of Euro-socialism. An aging population is placing ever greater strains
on those sclerotic economies. The Greeks expect the Germans to bail them out.
The Euro is falling against the dollar. And the Europeans have just had a
week to cool their heels while volcanic ash grounded most of their air
travelers.
Europe
is no model for the U.S.--even if we could mimic their behavior. Europeans
have sub-contracted their defense and security needs to the Americans for
generations. German Ambassador Klaus Scharioth last
fall told a Washington audience that Germany was grateful for the sixty
million U.S. troops who have served in his country since World War II.
That
was a rare and gracious tribute to American power. But it also served to
highlight Germany’s dependence on U.S. might for her defense. Now, a
small contingent of German troops is serving with NATO forces in Afghanistan,
and Germans are dying in defense of freedom for the first time in their long
history. Germans are increasingly a part of a coalition of the unwilling.
German soldiers in Afghanistan are openly questioning Berlin, demanding of
Chancellor Merkel the reason they are in that war-torn country.
Germany
can shrug. Atlas can’t. That’s why the U.S. cannot maintain
military strength and Euro-socialism at the same time. Perhaps that’s
what this administration really wants. President Obama’s curious--very
curious--statement that we are a dominant military superpower “whether
we like it or not” was most revealing. It was a statement from the soul
of a Peace Prize winner, from the heart of a nuclear pacifist.
It may
well be that this crisis that liberals don’t want to waste is being
used precisely to end America’s role as the world’s dominant
military superpower. It may be that the pacifist wing of the Democratic
Party, the wing that nominated Obama, intends to use the VAT and ObamaCare as
a means of disarming the U.S.
Soviet
military power eventually collapsed because spending grew out of control. The
Soviets had to leave Afghanistan. The left has always resented
America’s ability to project force. Perhaps they understand
there’s more than one way to bring the troops home.
Meanwhile,
it is increasingly clear: If Obama keeps his majorities in Congress, he will
give us a VAT. As endangered Freshman Tom Periello
(D-Va.) memorably put it: “Unless you tie our
hands, we’ll keep stealing.”
President
Obama’s Republican opponents have united around the theme of repealing
ObamaCare. Now, they must add to that opposition another binding pledge: Stop
VAT.
When it
comes to education trends, as California goes, so goes the nation. Which is
all the more reason to be concerned about the latest effort in California to
dumb down standards. The University of California’s Board of Admissions
and Relations with Schools (BOARS) has launched another salvo in its
long-running war against the SAT, the test used by many colleges and
universities to assess academic achievement among high school seniors. This
is only the latest in a series of moves by BOARS against the SAT, but this
one may be a stalking horse to eliminate standardized tests in general,
especially if they conflict with the goal of promoting racial and ethnic
diversity.
BOARS
has already eliminated a requirement that University of California applicants
take at least two subject-matter tests in addition to the SAT Reasoning Test.
Now BOARS is taking aim at the SAT directly. What makes the action more
suspicious is that BOARS’ own report notes that the SAT-R was developed
specifically in response to testing principles it promulgated and that the
new test “adds significant gains in predictive power of first year
grades at UC.” Nonetheless, BOARS is now recommending that students
forgo the SAT in favor of the less-popular ACT.
Both
tests have been accepted for more than 30 years and do a good job of
predicting first-year grades. So why is BOARS now signaling preference for
one test over another? After reading the report, it’s hard to come away
without feeling that the real target is standardized testing in general.
As
numerous studies and the raw data on test scores have shown, performance on
standardized tests varies not just between individuals but also between
different racial and ethnic groups. In general, black and Latino students
perform less well as a group than do white and Asian students. Since BOARS is
committed to boosting the number of black and Latino students admitted to the
UC system, standardized tests that do not produce politically correct results
are a problem. It’s not too far-fetched to wonder whether BOARS’
effort to discourage students from taking the SAT may be the first step in
getting rid of standardized tests altogether.
But
getting rid of standardized tests is not the way to solve the problem of
underperforming black and Latino students. Standardized tests, whether they
be the SAT or state tests taken to assess elementary and secondary school
performance required by the No Child Left Behind Act, merely document the
skills gap that exists between whites and Asians on the one hand and blacks
and Latinos on the other. The answer isn’t fixing the tests to produce
more even results between racial groups but improving the skills of those
students who lag behind.
In
1996, voters in California did away with racial preferences in college
admissions to state schools by enacting Proposition 209. Since then, many
administrators in the UC system have tried to figure out a backdoor way to
boost admissions of blacks and Latinos to the university’s flagship
schools, UC Berkley and UCLA. What they’ve failed to notice is that
black and Latino enrollment system-wide is up over the levels when racial
preferences were common. The students now enrolled under more race-neutral
standards are doing just fine, graduating in higher percentages than they
were when racial preferences admitted many students to campuses where they
couldn’t compete with their peers because their grades and test scores
were substantially lower.
Eliminating
standardized tests or dumbing down their contents
doesn’t help anyone. It simply sweeps evidence of academic disparities
under the rug, where they can’t be dealt with. If California really
wants to improve education for all its students, it will work to keep high
standards in place and encourage students to test what they have learned.
California students prefer the SAT to other standardized tests, judging by
the numbers who take this test now. BOARS’ job should be to encourage
students to make their own choices about which test they prefer, not to pick
one test over another -- but most of all not to discourage the use of
standardized tests altogether in the hopes of promoting greater diversity.
Some of the most
stunning articles I’ve read in a long while were in the Los Angeles
Times’ 2009 investigative series, “Failure gets a pass,”
which documents the near impossibility of firing unionized public school
teachers in the massive Los Angeles Unified School District -- even those
teachers credibly accused of sexually molesting or harassing their students.
The first article
in the Times series, “Firing tenured teachers can be a costly and
tortuous task,” documented the case of teacher Carlos Polanco, who was accused by the school district of
“immoral and unprofessional conduct” for making fun, in front of
his class, of a student who had just returned after a suicide attempt.
This is from the
school board: “He stated to the student, ‘Look you can’t
even kill yourself.’ Mr. Polanco then engaged
other students in the discussion of the suicidal student’s attempted suicide,
which prompted another student to engage in a detailed explanation of how to
hit a main artery.”
That’s
horrifying and a good reason to fire this cruel man, who obviously has little
concern for the safety of his students and lacks common decency. The school
board voted to fire him, but that’s just the first part in the firing
process in a district that, according to the Times, fires far fewer than one
teacher per 1,000 a year.
No wonder. The
union-dominated Commission on Professional Competence overruled the Polanco firing.
Average total pay
and benefit packages for firefighters in my newspaper coverage area of Orange
County, Calif., is an astounding $175,000 a year, which includes overtime and
all the various benefit goodies (total cost). The amount -- a compensation
package worthy of a chief executive officer -- literally is unbelievable,
especially to people who live outside the aptly named Golden State.
While California is
on the cutting edge of this absurdity, just as it is on the cutting edge of
various other trends for good or ill, this is a nationwide problem.
It’s crucial
that people grasp the extent of the raiding of the public treasury. Thanks to
the overtime system, rigged to boost employee pay rather than protect the
public till, many California firefighters earn more than $200,000 a year in
pay alone.
4/22/2010:
4/21/2010: The Graying
of Earth Day from John Fund Political Diary
When Earth Day began 40 years ago today, the aim
was to fight pollution and celebrate the planet’s natural diversity.
Much has changed. The planet is cleaner than it was in 1970, thanks in large
part to technology that wealthier societies have been able to invest in.
Meanwhile, the environmental lobby has turned into an institutionalized political
force uninterested in any diversity of opinion on how to improve the
environment.
Take public schools, where a mind-numbing
orthodoxy has become entrenched. Steve Mroczkiewicz,
a scientist for an Indiana crop protection company, found himself frustrated
when teachers at his child’s school organized a school-wide showing of
Al Gore’s “An Inconvenient Truth” during a class-time
celebration of Earth Day. Until he protested, kids were not given a chance to
opt out of the film even though it had already been shown twice throughout
the school.
With each passing year, Mr. Gore’s film
looks more dated and shrill. After a British parent objected to it being
shown to British schoolchildren because it was largely propaganda, a judge
agreed it was “a political film” riddled with scientific errors.
He held that showing it in school would be a violation of law, unless
accompanied by “guidance” pointing out its errors.
In the U.S. teachers appear increasingly unwilling
to provide such guidance. That’s why it’s up to parents to find
out what is being taught in schools and press for a balanced environmental
debate. Phelim McAleer, a
former Financial Times journalist turned documentary filmmaker, produced his
own film “Not Evil, Just Wrong,” expressly to counter Mr. Gore’s
alarmist rhetoric about global warming and warn that following the former
vice president’s prescriptions would threaten the world’s poor.
Mr. McAleer has formed a group called Balanced
Education for Everyone, which promotes showing his film along with Mr.
Gore’s.
The best way to celebrate Earth Day is to respect
that people have different views on how to preserve the natural environment.
That would also make for a much more interesting discussion than the stifling
celebration of political correctness it has become.
I won 19 Emmy Awards by reporting a myth: that business
constantly rips us off -- that capitalism is mostly cruel and unfair.
I know that’s a myth now. So I was glad to
see the publication of “The 5 Big Lies About American Business”
by Michael Medved.
I invite him on tomorrow’s Fox Business
Network show to talk about that.
“You can only make a profit in this country
by giving people a product or a service that they want,” he says.
“It’s the golden rule in action.”
Medved used to write about the movies, so he’s familiar with the
businessman as villain. I’ll play a clip from the movie “Syriana,” in which an oil tycoon makes this
ridiculous speech:
“Corruption keeps us safe and warm.
Corruption is why you and I are prancing around in here instead of fighting
over scraps of meat out in the street.”
“What’s interesting,” Medved commented, “is that in the old days,
Hollywood would have businesspeople who were very positive: George Bailey,
the Jimmy Stewart character, is a banker in ‘It’s a Wonderful
Life.’“
No longer. Today’s movie capitalists are criminals
or playboys. Apparently, Hollywood writers think it’s plausible that
CEOs have lots of time to sip cocktails and chase women.
“In school, we all studied a book called
“The Theory of the Leisure Class,” which ... indicted the leisure
class and these people who were out there exploiting other people and really
had nothing to do except sit on their yachts and go to their swimming pools
and their vacations.”
In real life, that’s nonsense.
“The higher up on the income scale you go,
the less leisure time you have. You make money in this country by working
hard.”
Medved’s second myth is that when the rich get richer, the poor get poorer.
This is the old zero-sum fallacy, which ignores that when two people engage
in free exchange, both gain -- or they wouldn’t have traded. It’s
what I call the double thank-you phenomenon. I understand why politicians and
lawyers believe it: It’s true in their world. But it’s not true
in business.
“If you believe that when the rich get
richer, the poor get poorer, then you believe that creating wealth causes
poverty, and you’re an idiot,” said Medved.
“One of the things that I hate is this term ‘obscene
profits.’ There are no obscene profits ... . (The current economic
downturn shows) “that when the rich get poorer ... everybody gets
poorer.”
Myth No. 3: Government is more fair and reliable
than business.
“Remember the last time you went into
Starbucks, and then remember the last time you went into the DMV to get your
license,” Medved said. “Where did you
get better treated? And it’s not because the barista is some kind of
idealist or humanitarian. She wants a tip. She wants you to come back to the
Starbucks ... .”
But the left doesn’t get it.
“This is the suspicion of the profit motive
-- the idea that if somebody is selflessly serving me, they’re going to
treat me better than somebody who wants to make a buck,” Medved said. But “(i)f you think about it in your own life, if somebody is
benefiting from his interaction with you ... it’s a far more reliable
kind of interaction than someone who comes and says I’m in this only
for you.”
Myth No. 4: The current downturn means the death
of capitalism.
“Capitalism is alive and well,” Medved said.
I’m also bugged when people argue that
today’s problems prove that capitalism “failed.” What
failed? We had a correction. A bubble popped. But from 1982 to now, the Dow
rose from 800 to 11,000. Had it happened without the bubble, we’d say
this is one of the great boom periods.
Medved added: “This is one of the biggest lies -- the idea that because
of capitalism, we’re all suffering. ... Poor people in America today,
people who are officially in poverty, have a higher standard of living in
terms of medical standards, in terms of the chances of going to college, in
terms of the way people live, than middle-class people did 30 years ago.
It’s an extraordinary achievement of technology and of the profit
sector.”
4/21/2010: Taxes
and Voting by Walter E. Williams
According to the Tax Policy Center, a Washington,
D.C., research organization, nearly half of U.S. households will pay no
federal income taxes for 2009. That’s up from the Tax
Foundation’s 2006 estimate that 41 percent of the American population,
or 121 million Americans, were completely outside the federal income tax
system. These Americans pay no federal income tax either because their
incomes are too low or they have higher income but credits, deductions and
exemptions that relieve them of tax liability. This lack of income tax
liability stands in stark contrast to the top 10 percent of earners, those
households earning an average of $366,400 in 2006, who paid about 73 percent
of federal income taxes. The top 25 percent paid 86 percent. The bottom 50
percent of taxpayers paid less than 4 percent of federal income taxes
collected.
Let’s not dwell on the fairness of such an
arrangement for financing the activities of the federal government. Instead,
let’s ask what kind of incentives and results such an arrangement
produces and ask ourselves whether these results are good for our country.
That’s a question to be asked whether or not one has federal income tax
liabilities.
Having 121 million Americans completely outside
the federal income tax system, it’s like throwing chum to political
sharks. These Americans become a natural spending constituency for
big-spending politicians. After all, if you have no income tax liability, how
much do you care about deficits, how much Congress spends and the level of
taxation? Political calls for tax cuts and spending restraints have little
appeal. Survey polls revealed this. According to The Harris Poll taken in
June 2003, 51 percent of Democrats thought the tax cuts enacted by Congress
were a bad thing while 16 percent of Republicans thought so. Among Democrats,
67 percent thought the tax cuts were unfair while 32 percent of Republicans
thought so. When asked whether the $350-billion tax cut package will help
your family finances, 59 percent of those surveyed said no and 35 percent
said yes. Tax cuts to many Americans mean just one thing: They pose a threat
to the federal handouts they receive.
Here’s my perhaps politically incorrect
question: If one has no financial stake in our country, how much of a say-so
should he have in its management? Let’s put it another way: I do not
own stock, and hence have no financial stake, in Ford Motor Company. Do you
think I should have voting rights or any say-so in the management of the
company? I’m guessing that the average sane person’s answer is
no. You say, “Williams, just where are you heading with this?”
I’m not proposing that we take voting rights away from those who do not
pay taxes. What I’m suggesting is that every American gets one vote in every
federal election, plus another vote for each $20,000 he pays in federal
taxes. With such a system, there’d be a modicum of linkage between
one’s financial stake in our country and his decision-making right. Of
course, unequal voting power could be reduced by legislating lower taxes.
This is not a far-out idea. The founders worried
about it. James Madison’s concern about class warfare between the rich
and the poor led him to favor the House of Representatives being elected by
the people at large and the Senate elected by property owners. He said,
“It is nevertheless certain, that there are various ways in which the
rich may oppress the poor; in which property may oppress liberty; and that
the world is filled with examples. It is necessary that the poor should have
a defense against the danger. On the other hand, the danger to the holders of
property cannot be disguised, if they be undefended against a majority
without property.”
The government of our country has become
increasingly incompetent, corrupt, and dysfunctional. Although Barack Obama
has certainly hastened our government’s slide toward mediocrity, the
problems didn’t begin with him, nor are they likely to end on the very
happy day when he leaves office.
Moreover, many of the issues that prevent our
government from operating at even the sub-optimal quasi-effectiveness of the
Feds at their best are very difficult to solve. Still, until you identify the
problems, it’s difficult to come up with the solutions. So, let’s
talk about some of the reasons why government in this country no longer works
for the benefit of the American people.
Earmarks: When earmarks first became a hot issue
during the Bush years, I have to admit that I was one of the people who
shrugged my shoulders and said something like, “Sure, that’s
something we should work on, but is it really all that important compared to
the money we spend on entitlement programs?”
Let me tell you why I was wrong: Earmarks have
become a means of legalized bribery. We get all upset about politicians who
are tied in any way, shape, or form to Jack Abramoff -- but what Abramoff did
goes on every day of the week. Where Abramoff blew it was by explicitly
saying, “I’ll get you this much money and you’ll do this
for me.” Yet, lobbyists do the exact same thing all the time, but they
just don’t say it out loud. They give money to congressmen and expect
to get earmarks in return. They do, in fact, get the earmarks they paid for
-- and it’s perfectly legal.
Keep in mind that although you can find earmarks
stretching way back until the earliest days of the country, using them as a
form of congressional payola is relatively new. Just to give you one example,
courtesy of Americans for Prosperity:
Taxpayers for Common Sense calculated that the 1970
Defense Appropriations Bill had a dozen earmarks; the 1980 bill had 62
earmarks; and by 2005, the defense bill had skyrocketed to 2,671 earmarks.
As earmarks have proliferated, Abramoff-style
government has gone from being the exception to the rule in Congress.
Political Polarization Unprecedented Since The
Civil War: One of the most remarkable things you’ll notice when you
read about politics in say, the late 1800s, is that despite the fact that
both parties fought like cats and dogs, they also had a very similar approach
to governance. Setting aside a handful of differences on things like tariffs,
both parties agreed on the overwhelming majority of issues. Even in this
country 40-50 years ago, the parties were much more similar than they are
today. John F. Kennedy is an overrated Democratic President, but he was
serious about defending America, he was an ardent anti-Communist, he believed
in tax cuts -- and on social issues, like most Democrats of his day,
he’d have far more in common with Jim DeMint than he would with
Democrats like Barney Frank. On the other hand, look at Richard Nixon, the
man Kennedy defeated in 1960. Nixon was a left-of-center, pro-choice
Republican who pushed price controls, tax increases, and created the EPA. So,
whether voters chose a man like Kennedy or Nixon, they still weren’t
usually getting too far from the center.
However, after the radical left wing completely
took over the Democratic Party in the late sixties, the Dems
became completely dominated by liberals. On the other side, Reagan’s
election and success managed to shift the Republican Party to the right,
although regrettably, not as far as the Dems went
left. In other words, the average Democrat in Congress now has more in common
ideologically with Trotsky and Lenin than he does Washington and Jefferson.
Meanwhile, Republicans idealize Reagan, who opposed everything the liberal
left stands for. When both parties start that far apart, it’s hard to
work together on almost any issue.
A Far Left Wing Media: For a long time, the
mainstream media in this country could fairly be classified as center-left.
However, over time it has drifted from center-left to far-left and it has
affected the way our politicians behave.
Politicians on the Right know they can’t get
a fair shake from the media; so they tend to be overly cautious, even though
the populace leans to the Right. On the other hand, politicians on the Left
have been emboldened by the unwavering support of the media. Liberal
politicians know that their every act will be cast in the most favorable
light, their lies will be ignored, and their political enemies will be
smeared at every turn.
Happily, this has not gone unnoticed by the public
and it’s had consequences. The mainstream media’s credibility has
cratered, it’s losing marketshare to the
alternative media, and many of these left-wing propaganda outlets
masquerading as newspapers are going out of business. Every time one of these
liberal mainstream media reporters loses his job, this country becomes a
little better place.
The Permanent Campaign: Over time, as politics has
become more professionalized, interest groups have become more powerful,
YouTube and the blogosphere have begun capturing every detail, and a 24 hour
news cycle has become the norm, political campaigns have ceased to end.
When every vote, every quip, and every campaign
stop is going to be noticed, catalogued, and may turn up in your
opponent’s campaign commercial or infuriate a group you’ll be
counting on come election time, the latitude politicians have is severely
curtailed.
If you’re a Republican, are you going to
cross the NRA? The Club for Growth? The Christian Coalition? If you’re
liberal, are you going to tell Planned Parenthood to shove it on a big issue?
How about the SEIU? What about MoveOn? On every
issue, in every situation, most politicians in both parties have very little
room to maneuver outside whatever the party line happens to be.
Politics As A Profession: As America has become
more polarized, the advantages of incumbency have become more pronounced, and
gerrymandering has become more prevalent, politics has become a lifetime job
for many members of Congress. In large swathes of the country, if you get
elected once, don’t get caught with any bribe money in your freezer,
and adhere to the party line, you will be in Congress until your aides are
dragging you in off your deathbed to vote for a pig farm earmark for your
district. The problem with that is simple: A lot of these career politicians
in Congress no longer have to pay any attention to the other side, their own
constituents, or to anyone other than extremist interest groups who could
potentially back a primary challenger. That’s not good for this
country.
The 17th Amendment: Almost all Americans have
grown up with the idea of senators being popularly elected, but it
wasn’t always that way. Up until 1913, senators were elected by state
legislatures and in all honesty, despite the fact that there were some
problems with that process, it was far better for the country. Why? Because senators
elected by state legislatures zealously guarded the power of the states. That
was good for the country because as a general rule, the more localized the
government, the better it can know the needs of its citizens and the better
able it is to serve them.
Once senators no longer had to answer to state
legislatures, they were incentivized to concentrate more power in their own
hands, in D.C. Despite the fact that there are still a few people on the
“repeal the 17th Amendment” bandwagon, that horse has long since
left the barn and isn’t likely to be coaxed back inside.
The Tenth Amendment
Doesn’t Exist In The Real World: Our Founding Fathers would be shocked
and appalled by the way we openly disregard our Constitution. Article 1
Section 8 of the Constitution clearly limits the powers of Congress and the
10th Amendment reads,
The powers not delegated to the
United States by the Constitution, nor prohibited by it to the States, are
reserved to the States respectively, or to the people.
Since that’s the case,
how is it that our government has gone so out of control that the health care
legislation that was just passed actually requires people to buy health
insurance as a condition of citizenship? How long and hard do you have to
torture the plain language of the Constitution to conclude that Congress can
force you to buy any product it so desires: health care, condos from Nancy
Pelosi, union cars, Barack Obama’s biography or anything else it wants?
Why do you think we so seldom
pass constitutional amendments any more? In all honesty, it’s because
Congress and even many of the judges in our court system pay so little
attention to the Constitution that they just do anything they want.
That’s the biggest reason why our government does so many things slowly,
stupidly, and inefficiently: it’s because our system of government was
supposed to preclude the government from doing those things in the first
place.
Almost a year ago, in a Washington Examiner column
on the Chrysler bailout, I reflected on the Obama administration’s
decision to force bondholders to accept 33 cents on the dollar on secured
debts while giving United Auto Worker retirees 50 cents on the dollar on
unsecured debts.
This was a clear violation of the ordinary
bankruptcy rule that secured creditors are fully paid off before unsecured
creditors get anything. The politically connected UAW folks got preference
over politically unconnected bondholders. “We have just seen an episode
of Gangster Government,” I wrote. “It is likely to be a
continuing series.”
Fast-forward to last Friday, when the Securities
Exchange Commission filed a complaint against Goldman Sachs, alleging that
the firm violated the law when it sold a collaterized
debt obligation based on mortgage-backed securities without disclosing that
the CDO was assembled with the help of hedge fund investor John Paulson.
On its face the complaint seems flimsy. Paulson
has since become famous because his firm made billions by betting against
mortgage-backed securities. But he wasn’t a big name then, and the
sophisticated firm buying the CDO must have assumed the seller believed its
value would go down.
That’s not the only fishy thing about the
complaint. Tuesday came the news, undisclosed by the SEC on Friday, that the
commissioners approved the complaint by a 3-2 party-line vote. Ordinarily the
SEC issues such complaints only when the commissioners unanimously approve.
Fishy thing No. 3: Democrats immediately used the
complaint to jam Sen. Christopher Dodd’s financial regulation through
the Senate. You may want to believe the denials that the Democratic
commissioners timed the action in coordination with the administration or
congressional leaders.
But then you may want to believe there was no
political favoritism in the Chrysler deal too. The SEC complaint looks a lot
like Gangster Government to me.
The Dodd bill, however, has it trumped. Its
provisions promise to give us one episode of Gangster Government after
another.
At the top of the list is the $50 billion fund
that the Federal Deposit Insurance Corp. could use to pay off creditors of
firms identified as systematically risky, i.e., “too big to
fail.”
“The Dodd bill,” Democratic Rep. Brad
Sherman writes, “has unlimited executive bailout authority.
That’s something Wall Street desperately wants but doesn’t dare
ask for.”
Politically connected creditors would have every
reason to assume they’d get favorable treatment. The Dodd bill
specifically authorizes the FDIC to treat “creditors similarly
situated” differently.
Second, as former Bush administration economist
Larry Lindsey points out, the Dodd bill gives the Treasury and the FDIC
authority to grant an unlimited number of loan guarantees to “too big
to fail” firms. Chief executive officers might want to have receipts
for their contributions to Sen. Charles Schumer and the Obama campaign in
hand when they apply.
Lindsey ticks off other special favors.
“Labor gets ‘proxy access’ to bring its agenda items before
shareholders as well as annual ‘say on pay’ for executives.
Consumer activists get a brand-new agency funded directly out of the seniorage the Fed earns. No oversight by the Federal
Reserve Board or by Congress on how the money is spent.”
Then there are carve-out provisions provided for
particular interests. “Obtaining a carve-out isn’t rocket
science,” one Republican K Street lobbyist told the Huffington Post.
“Just give Chairman Dodd and Chuck Schumer a s--tload
of money.”
The Obama Democrats portray the Dodd bill as a
brave attempt to clamp tougher regulation on Wall Street. They know that
polls show that voters strongly reject just about all their programs to
expand the size and scope of government, with the conspicuous exception of
financial regulation.
Republicans have been accurately attacking the
Dodd bill for authorizing bailouts of big Wall Street firms and giving them
unfair advantages over small competitors. They might want to add that it
authorizes Gangster Government -- the channeling of vast sums from the
politically unprotected to the politically connected.
That can boomerang even against the latter.
Goldman Sachs employees gave nearly $1 million to the Obama campaign and $4.5
million to Democrats in 2008. That didn’t prevent the Goldman from
being shoved under the SEC bus. Gangster Government may look good to those
currently in favor, but, as some of Al Capone’s confederates found out,
that status is not permanent, and there is always more room under the bus.
Michael Barone, the Examiner’s senior
political analyst, can be contacted at mbarone@washingtonexaminer.com. His
columns appear Wednesday and Sunday, and his stories and blog posts appear on
ExaminerPolitics.com.
4/21/2010: The Beholden
State by Steven Malanga
How public-sector unions broke California
The camera focuses on an official of the Service
Employees International Union (SEIU), California’s largest
public-employee union, sitting in a legislative chamber and speaking into a
microphone. “We helped to get you into office, and we got a good
memory,” she says matter-of-factly to the elected officials outside the
shot. “Come November, if you don’t back our program, we’ll
get you out of office.’
Illustration
by Sean Delonas.
The video has become a
sensation among California taxpayer groups for its vivid depiction of the
audacious power that public-sector unions wield in their state. The
unions’ political triumphs have molded a California in which government
workers thrive at the expense of a struggling private sector. The state’s
public school teachers are the highest-paid in the nation. Its prison guards
can easily earn six-figure salaries. State workers routinely retire at 55
with pensions higher than their base pay for most of their working life.
Meanwhile, what was once the most prosperous state now suffers from an
unemployment rate far steeper than the nation’s and a flood of firms
and jobs escaping high taxes and stifling regulations. This toxic
combination—high public-sector employee costs and sagging economic fortunes—has
produced recurring budget crises in Sacramento and in virtually every
municipality in the state.
How public employees
became members of the elite class in a declining California offers a
cautionary tale to the rest of the country, where the same process is happening
in slower motion. The story starts half a century ago, when California public
workers won bargaining rights and quickly learned how to elect their own
bosses—that is, sympathetic politicians who would grant them outsize
pay and benefits in exchange for their support. Over time, the unions have
turned the state’s politics completely in their favor. The result:
unaffordable benefits for civil servants; fiscal chaos in Sacramento and in
cities and towns across the state; and angry taxpayers finally confronting
the unionized masters of California’s unsustainable government.
[Read more]
When I first began to study the
history of slavery around the world, many years ago, one of the oddities that
puzzled me was the practice of paying certain slaves, which existed in
ancient Rome and in America’s antebellum South, among other places.
In both places, slave owners or
their overseers whipped slaves to force them to work, and in neither place
was whipping a slave literally to death likely to bring any serious
consequences.
There could hardly be a greater
power of one human being over another than the arbitrary power of life and
death. Why then was it necessary to pay certain slaves? At the very least, it
suggested that there were limits to what could be accomplished by power.
Most slaves performing most tasks
were of course not paid, but were simply forced to work by the threat of
punishment. That was sufficient for galley slaves or plantation slaves. But
there were various kinds of work where that was not sufficient.
Tasks involving judgment or
talents were different because no one can know how much judgment or talent
someone else has. In short, knowledge is an inherent constraint on power.
Payment can bring forth the knowledge or talent by giving those who have it
an incentive to reveal it and to develop it.
Payment can vary in amount and
in kind. Some slaves, especially eunuchs in the days of the Ottoman Empire,
could amass both wealth and power. One reason they could be trusted in
positions of power was that they had no incentive to betray the existing rulers
and try to establish their own dynasties, which would obviously have been
physically impossible for them.
At more mundane levels, such
tasks as diving operations in the Carolina swamps required a level of
discretion and skill far in excess of that required to pick cotton in the
South or cut sugar cane in the tropics. Slaves doing this kind of work had
financial incentives and were treated far better. So were slaves working in
Virginia’s tobacco factories.
The point of all this is that
when even slaves had to be paid to get certain kinds of work done, this shows
the limits of what can be accomplished by power alone.
Yet so much of what is said and
done by those who rely on the power of government to direct ever more
sweeping areas of our life seem to have no sense of the limits of what can be
accomplished that way.
Even the totalitarian
governments of the 20th century eventually learned the hard way the limits of
what could be accomplished by power alone. China still has a totalitarian
government today but, after the death of Mao, the Chinese government began to
loosen its controls on some parts of the economy, in order to reap the
economic benefits of freer markets.
As those benefits became clear
in higher rates of economic growth and rising standards of living, more
government controls were loosened. But, just as market principles were
applied to only certain kinds of slavery, so freedom in China has been
allowed in economic activities to a far greater extent than in other realms
of the country’s life, where tight control from the top down remains
the norm.
Ironically, the United States
is moving in the direction of the kind of economy that China has been forced
to move away from. China once had complete government control of medical
care, but eventually gave it up as the disaster that it was.
The current leadership in
Washington operates as if they can just set arbitrary goals, whether
“affordable housing” or “universal health care” or
anything else — and not concern themselves with the repercussions
— since they have the power to simply force individuals, businesses,
doctors or anyone else to knuckle under and follow their dictates.
Friedrich Hayek called this
mindset “the road to serfdom.” But, even under serfdom and
slavery, experience forced those with power to recognize the limits of their
power. What this administration — and especially the President —
does not have is experience.
Barack Obama had no experience
running even the most modest business, and personally paying the consequences
of his mistakes, before becoming President of the United States. He can
believe that his heady new power is the answer to all things.
To find out more about Thomas
Sowell and read features by other Creators Syndicate columnists and
cartoonists, visit the Creators Syndicate web page at www.creators.com.
Thomas Sowell is a senior fellow at the Hoover Institution, Stanford
University, Stanford, CA 94305. His Web site is www.tsowell.com.
COPYRIGHT 2010 CREATORS.COM
4/20/2010:
4/16/2010: from the
Future of Freedom Foundation:
Stripped of its
academic jargon, the welfare state is nothing more than a mechanism by which
governments confiscate the wealth of the productive members of a society to
support a wide variety of welfare schemes. A substantial part of the
confiscation is effected by taxation. But the welfare statists were quick to
recognize that if they wished to retain political power, the amount of
taxation had to be limited and they had to resort to programs of massive
deficit spending, i.e., they had to borrow money, by issuing government
bonds, to finance welfare expenditures on a large scale. — Alan
Greenspan, “Gold and Economic Freedom” [1966]
The new governor is on a mission to
make his state competitive again in attracting people and capital.
“I said all during
the campaign last year that I was going to govern as if I was a
one-termer,” explains New Jersey Governor Chris Christie on a visit
this week to the Journal’s editorial board. “And everybody felt
that it was just stuff you say during a campaign to sound good. I think after
the first 12 weeks, given the stuff I’ve done, they figure:
‘He’s just crazy enough to do it.”
Call it crazy, or just
call it sensible: Mr. Christie is on a mission to make New Jersey competitive
once again in the contest to attract people and capital. During last
fall’s campaign, while his opponent obliquely criticized Mr. Christie’s
size, some Republicans worried that their candidate was squishy—that he
wasn’t serious about cutting spending and reining in taxes. Turns out
they were wrong.
Listen to Mr.
Christie’s take on the state of his state: “We are, I think, the failed
experiment in America—the best example of a failed experiment in
America—on taxes and bigger government. Over the last eight years, New
Jersey increased taxes and fees 115 times.” New Jersey’s
residents now suffer under the nation’s highest tax burden. Yet the tax
hikes haven’t come close to matching increases in spending. Mr.
Christie recently introduced a $29.3 billion state budget to eliminate a
projected $11 billion deficit for fiscal year 2011.
California and New York
have attracted headlines for their budget woes. Yet, as Mr. Christie points
out, “Their problems are much smaller than ours as a percentage. [Gov.]
David Paterson’s talking about an $8.2 billion deficit in New
York—I only wish.”
After taking office in
January, Mr. Christie declared an official state of emergency. This allowed
him to freeze $2.2 billion in spending that had already been authorized. Now
he needs a Democratic legislature to turn his freeze into an actual cut and
to enact the deeper reductions contained in his 2011 budget.
It might well happen. Many
Democrats recognize the state’s deep-seated fiscal woes. Mr. Christie
has already signed into law a bipartisan plan that begins to reform the
state’s generous benefit system for government workers. Facing unfunded
liabilities of $90 billion in pension and medical plans, Mr. Christie worked
with lawmakers to change retirement benefits for new workers and to require
all new state employees to pay 1.5% of their medical insurance costs. Until
now they were paying nothing.
He wants to go further.
“We need to move forward to try to make some changes in the pension
system for current employees,” he says. “There’s all kinds
of problems in doing that, some legal… You can’t take away vested
benefits, but the argument of whether increases going forward are actually
vested or not is an interesting legal issue that we’re going to attempt
to challenge...” He adds that the current retirement age for state
employees, 62 [California is 55], “needs to be moved up
further.”
As you can imagine, the Christie
agenda is not wildly popular among presidents of government-employee unions.
To put it more precisely, Mr. Christie is now in a political street fight
with the head of the New Jersey Education Association, the teachers union
that spent millions last year to defeat him.
NJEA President Barbara Keshishian visited his office this week to apologize for
a recent email sent to thousands of teachers by a union official that
included a mock prayer for the governor’s death. According to Mr.
Christie, the conversation went something like this: He accepted her apology
immediately but asked if the email sender would be fired for “doing
something that monumentally stupid.” When the union chief questioned
why the man should be fired, Mr. Christie promptly ended the meeting.
“I’m a product
of public schools in New Jersey,” Mr. Christie explains, “and I
have great admiration for people who commit their lives to teaching, but this
isn’t about them. This is about a union president who makes $265,000 a
year, and her executive director who makes $550,000 a year. This is about a
union that has been used to getting its way every time. And they have
intimidated governors for the last 30 years.”
While the state lost
121,000 jobs last year, education jobs in local school districts soared by
more than 11,000. Over the past eight years, according to Mr. Christie, K-12
student enrollment has increased 3% while education jobs have risen by more
than 16%. The governor believes cuts in aid to local schools in his budget
could be entirely offset if existing teachers would forgo scheduled raises
and agree to pay 1.5% of their medical insurance bill for one year, just as
new state employees will be required to do every year.
A new Rasmussen poll found
that 65% of New Jersey voters agree with him about a one-year pay freeze for
teachers. But the teachers union wants to close the budget gap by raising the
income tax rate on individuals and small businesses making over $400,000 per
year to 10.75% [the top rate is already 10.93% in California] from its
current 8.97%.
Mr. Christie doesn’t
think that state and local budget problems can be fixed without tackling
education spending. That’s because the state has a hybrid system in
which local property taxes fund schools and some of the money is redistributed
by the state from affluent areas to poorer communities. According to Mr.
Christie, New Jersey taxpayers are spending $22,000 per student in the Newark
school system, yet less than a third of these students graduate, proving that
more money isn’t the answer to better performance. He favors more
student choice is, which is why he’s ramping up approvals for charter
schools.
On another front, Mr.
Christie is seeking a ballot measure this fall that would amend the
state’s constitution to limit increases in local property taxes to 2.5%
annually. To put this question before voters he needs to win over
three-fifths of the state legislature and expects legislators to vote in May
or June.
Will New Jersey send a
message across the country that state government can be turned around without
federal bailouts? “We’re such a long way away from a
message,” Mr. Christie says, “because, you know, the message
might be, ‘Look at that poor SOB. There he is lying dead on State
Street in Trenton. It’s over. OK, everybody back to our corners and
let’s go back to the normal game.’ ... I hope, that if
we’re successful, [the message] can be...that you can do this.”
Meanwhile, Mr. Christie
has started spreading the news that the Garden State aims to compete once
again for businesses, jobs and residents. He notes that for years the state
offered a better tax environment than New York, which encouraged city
dwellers to discover New Jersey’s beautiful suburbs. Mr. Christie says
that he recently bumped into former New York Gov. George Pataki, who noted
that he’d been shocked to learn that New Jersey now has an even higher
burden than its tax-crazy neighbor. “See what happens when you’re
not looking?” he said to Mr. Pataki. “Snuck right up on ya.”
The governor aims to move
tax rates back to the glory days before 2004, when politicians lifted the top
income tax rate to its current level of almost 9% from roughly 6%. Piled on
top of the country’s highest property taxes, as well as sales and
business income taxes, the increase brought the state to a tipping point
where the affluent started to flee in droves. A Boston College study recently
noted the outflow of wealthy people from the state in the period 2004-2008.
The state has lately been in a vicious spiral of new taxes and fees to make up
for the lost revenue, which in turn causes more high-income residents to
leave, further reducing tax revenues.
With a 9.8% unemployment
rate (significantly above neighboring New York) [in California it’s
12.7%], Mr. Christie has plenty of data to make his case that the
state’s government has put too much of a burden on the private economy.
He also is heartened by polls showing public frustration with the cost of the
state’s lavish programs. “The ones who pay are going to stand up
and say, ‘Enough already, I can’t do it!’”
He needs them to stand up
now and support him. While voters seem ready for a new approach to
governance, the new governor’s personal popularity has suffered a bit
amid the acrimony. Mr. Christie says that the teachers union has spent $1.8
million in the last month on media advertising to defeat his budget plan.
“That’s just the beginning. We’re in April. This budget
isn’t going to pass until June 30.”
Still, allowing himself a
bit of optimism, he envisions the impact if he succeeds. “What I hope
it will do in the end is first and foremost fix New Jersey, and end this myth
that you can’t take these people on,” he says. “I just hope
it shows people who have similar ideas to mine that they can do it. You just
have to stand up and grit your teeth and know your poll numbers are going to
go down—and mine have—but you gotta
grit it out because the alternative is unacceptable.” He also strongly
believes that voters elected him specifically to fight this fight.
“They’re fed up. They’ve had enough. In normal
circumstances I wouldn’t win,” he says.
While debates over taxes
and spending remain bitter, Mr. Christie has been pleased with an emerging
consensus to address the state’s regulatory morass. He is now working
on a bipartisan bill with Democrats in the state Senate to reduce red tape in
Trenton. “We have Democrats who are very interested in wanting to lower
regulation because they know... it’s a no-cost way of trying to spur
business growth,” he says.
He’s tasked his
lieutenant governor, Kim Guadagno, with reviewing
800 pages of regulations from the outgoing administration of Democratic Gov.
Jon Corzine, regulations Mr. Christie froze upon taking office. On Monday,
Ms. Guadagno will issue a report with
recommendations on whether to let them go forward. She has already held 31
public meetings with business and government officials to discuss how to
improve the state’s regulatory climate. “You’re not going
to have to spend nearly as much money to start your business in New Jersey,”
says the governor.
And if he is successful in
the budget battle of Trenton, the state’s residents won’t have to
spend nearly as much to live there.
Mr. Freeman is assistant editor of the
Journal’s editorial page.
Printed in The Wall Street
Journal, page A11
Copyright 2009 Dow Jones
& Company, Inc. All Rights Reserved
4/15/2010: This
morning I sent my taxes in and my first quarter estimated payments for 2010.
This year, California pushed up the due dates for estimated taxes: The June
15 payment (which used to be due July 15) now includes the September 15
payment (which used to be due October 15). IN other words, 75% of my 2010
taxes are due before I’ve earned 50% of my 2010 income. This produces:
¨
Budget gimmicks & interest free loans to the slimy
thieving commie bastard morons in Sacramento;
¨
negative cash flow for citizens (no doubt causing a slow
down in spending and investment); and
¨
yet more damage to the California economy.
4/15/2010: Why
Government Can’t Create Jobs by Mark Ahlseen
Mark Ahlseen
is associate professor of economics at King College in Bristol, Tennessee.
Any
nation needs a certain number of government employees in order to function.
But ever since the Employment Act of 1946 a different view of government
employment has emerged: that government can alleviate downturns in economic
activity by spending—or “investing”—funds on projects
that will stimulate employment. The government may be either a direct
employer (as when it increases the numbers in our armed forces) or an
indirect employer (as when it increases spending on highways, which increases
employment in construction companies). As a nation we may need larger armies
or more and better highways, but that is not germane to the discussion at
hand.
The
insidious notion persists that government job creation actually generates an
increase in employment. According to this view, if construction companies
increase employment by 100,000 jobs due to a $3 billion government spending
program to finance highway construction, then employment is 100,000 jobs
ahead of what it might be in the absence of the program.
Rarely
does the public debate focus on how employment in other sectors is affected
when the government seeks the $3 billion necessary to finance its program.
These effects are important but, unfortunately, less visible because they are
spread among hundreds, if not thousands, of employers.
Government
spending, including spending designed to stimulate employment, may be derived
from three sources. The first is taxes. If individual income taxes are raised
by $3 billion to fund our highway project, disposable income is reduced by $3
billion. Consequently, individuals will demand less clothing, fewer
appliances, and so on. Private sector employers will notice and respond by
laying off workers. Since most of us will agree that we can spend our income
more efficiently than can the government if only for the fact we do not have
to pay a bureaucratic overhead charge—lay-offs in the affected
companies will exceed the employment added by companies constructing the new
highways.
If
corporate taxes are raised instead of individual income taxes, they will
eventually result in higher prices for consumers, lower real wages for
workers, and lower returns for investors. All of these result in a decreased
ability to buy clothing and appliances with the net result that unemployment
increases, not decreases.
A
second source of funds is government borrowing, but this borrowing increases
the price of lendable funds, which reduces the amount of investment in the
private sector. Consequently, fewer new factories, machines, and homes will
be built. Not only does this decrease in private investment slow economic
growth, it results in additional unemployment in these industries.
A
final source of funds is the government’s central bank, which can
create new money. However, this monetary inflation results in price inflation
by eroding the purchasing power of the dollar. This decrease in purchasing
power will eventually increase unemployment as well.
Unfortunately,
the political appeal of government spending stems from the fact that the jobs
created are noticeable to the average voter, while the handful of jobs lost
here and there are not attributed to the government spending program.
Interestingly, from 1960 to 1988 there has been a positive, and statistically
significant, correlation between public aid (as a percentage of GNP) and the
unemployment rate. Conventional wisdom would have the public believe that as government
“invests” in people the unemployment rate decreases. Yet the
opposite is the case. For the same years there has been a positive, though
statistically insignificant, correlation between government employment (as a
percentage of total employment) and the unemployment rate. This suggests that
as government work is created more jobs are lost elsewhere resulting in a
rising unemployment rate.
As
a nation, we undoubtedly need government employees for such things as
national defense, police protection, and administering our court system
(though I do question our founders’ wisdom in relegating the delivery
of first-class mail to government employees). But it is a fallacy of the
Keynesian legacy that government can reduce unemployment by priming the pump
with spending programs. Government needs to reduce spending and taxes in
order to leave income in the hands of individuals who earned it and who can
spend it much more efficiently than the government can.
4/14/2010: Justice Stevens,
ObamaCare, and the Constitution by Roger Pilon
Roger Pilon is vice
president for legal affairs at the Cato Institute and director of
Cato’s Center for Constitutional Studies.
“Are there any
longer any constitutional limits on federal power?
“…But from
the start, the main idea was clear: Whatever the nation’s faults in
practice, the point of life was to live it, freely, not dependent on
government. Indeed, answering anti-Federalists’ fears that the new
national government would be too powerful, Federalists detailed exquisitely
the Constitution’s limits on federal power. Neither camp could have
imagined anything like ObamaCare…
“A watershed
moment came in 1942, when the court interpreted the Commerce Clause as giving
Congress virtually unlimited authority over economic activity.
“The result today
is unfunded liabilities no one knows how to meet, debt as far as the eye can
see, and taxes in the offing that will cripple individuals and businesses
alike — quite apart from the restraints on liberty that dependency on
government entails.”
[Read more]
4/14/2010: Percentage of each President’s cabinet who worked in
the private sector, not a government job, prior to their appointment to the
cabinet.
|
T. Roosevelt
Taft
Wilson
Harding
Coolidge
Hoover
F. Roosevelt
Truman
Eisenhower
|
38%
40%
52%
49%
48%
42%
50%
50%
57%
|
Kennedy
Johnson
Nixon
Ford
Carter
Reagan
G. H. W. Bush
Clinton
G. W. Bush
|
30%
47%
53%
42%
32%
56%
51%
39%
55%
|
And the winner is… Obama
with 8%
4/14/2010: “Spreading
The Wealth” Isn’t Fair by Arthur C. Brooks
Jean-Baptiste
Colbert, the 17th-century French minister of finance, once remarked that
“the art of taxation consists in so plucking the goose as to obtain the
largest amount of feathers with the smallest possible amount of
hissing.”
Many Americans are already
hissing loudly, but the plucking in earnest is only beginning. Starting in
January 2011, “the rich”—defined by President Obama as
individuals earning more than $200,000 and families earning more than
$250,000 per year—will see their marginal tax rate rise to 39.6% from
35%. Their effective tax rate will increase even more as certain credits and
deductions are phased out.
Meanwhile, projections
from the Urban-Brookings Tax Policy Center showed that 38% of Americans were
expected to have had zero or negative federal individual income tax liability
in 2009, before the stimulus was enacted. After President Obama’s
budget, stimulus, and other tax changes, this proportion will increase to
nearly 46% in 2011, all while the federal government grows in size.
The president’s rationale?
He wants to create what he calls “a sense of balance and fairness in
our tax code,” as he said on the campaign trail, and ensure that
well-off Americans “pay their fair share.” He famously defended
his planned tax hikes to “Joe the Plumber” by saying, “I
think when you spread the wealth around it’s good for everybody.”
If you think spreading
money around by force seems like an odd definition of fairness, you’re
not alone. A 2009 survey conducted by the polling firm Ayers-McHenry asked
respondents to choose which of the following statements came closer to their
views: “Government policies should promote fairness by narrowing the
gap between rich and poor, spreading the wealth, and making sure that
economic outcomes are more equal”; or “Government policies should
promote opportunity by fostering job growth, encouraging entrepreneurs, and
allowing people to keep more of what they earn.” Respondents chose the
second option over the first, 63% to 31%.
Most Americans think tax
rates are already unfairly high. A February 2009 Harris poll found that on
average, Americans believe the maximum amount anyone should have to pay in
total taxes is less than 16% of income. The Tax Policy Center notes that
families earning $75,000 and above are paying more than this in federal taxes
alone; the highest income earners pay much more.
Nor do Americans believe
it is fair to expand the pool of people with no income tax liability at all.
According to a Tax Foundation poll in April 2009, 66% of Americans agree with
the statement that “Everyone should be required to pay some minimum
amount of tax to help fund government.” People understand that good
citizenship means we all contribute in some way to the national project.
Simple facts about our tax
system do not support the contention that it is “unfair” in favor
of the rich. According to the most recent IRS data, the top 5% of earners
bring in 37% of the income but pay 60% of the federal individual income
taxes. The bottom half of earners bring home 12% of the income but pay 3% of
the taxes. Today, according to the Tax Foundation, 60% of Americans consume
more in government services than they pay in taxes.
In sum: A large majority
disagrees with the current administration’s redistributionist
philosophy; believes the rich already face a tax rate that is too high; and
disapproves of the fact that more and more Americans pay nothing in federal
income taxes. So why do arguments like the president’s persist?
The answer is that nobody
wants to sound anti-poor, so we too easily concede the notion of fairness to
those who define it as redistribution and criticize redistribution only
because it leads to economic inefficiency.
This is an error. There is
nothing inherently fair about equalizing incomes. If the government penalizes
you for working harder than somebody else, that is unfair. If you save your
money but retire with the same pension as a free-spending neighbor, that is
also unfair.
Real fairness, as most of
us see it, does not mean bringing the top down. Yes, free markets tend to
produce unequal incomes. We should not be ashamed of that. On the contrary,
our system is the envy of the world and should be a source of pride.
Generation after generation, it has rewarded hard work and good values,
education and street smarts. It has offered the world’s most
disadvantaged not government redistribution but a chance to earn their
success.
That is true fairness,
American-style.
Mr. Brooks is president of the American Enterprise
Institute and author of “The Battle: How the Fight Between Free
Enterprise and Big Government Will Shape America’s Future,”
forthcoming from Basic Books in June.
4/13/2010: Empathy
and the Supreme Court by Jonah Goldberg
Obama’s abstract standard is nothing more than state-sanctioned
prejudice.
...liberals who like
Stevens’ rulings insist he understands the plight of the downtrodden,
despite the fact that the nearly 90-year-old justice was born rich and has
served on the court for almost 35 years, becoming more liberal as he has
become more distant from life as lived by the little guys.
Meanwhile, Clarence
Thomas was born dirt poor and black in rural Georgia and spends his vacations
exploring America in an RV. But those same liberals insist he doesn’t
understand poverty and race the way Stevens does. How do they know? Because
they don’t like his rulings.
In other words, the
empathy-for-the-little-guy standard is simply a Trojan horse for an approach
just as abstract as any endorsed by the right. In fact, I would say
it’s more abstract because at least there’s a text conservatives
invoke -- the Constitution -- rather than the indefinable feeling of
“empathy.”
[Read
More]
4/13/2010: The
VAT-man cometh? by Dr. Mark W. Hendrickson
...As economists for
the past two centuries have made plain, the real burden of government is not
what it taxes but what it spends, because whatever it spends comes at the
expense of citizens, whether via taxes, borrowing, or creating additional
Federal Reserve Notes. Reducing the burden of government means slashing
government spending, not raising taxes...
[Read
more]
4/13/2010: Income
falls 3.2% during Obama’s term by Joseph Curl
Real
personal income for Americans - excluding government payouts such as Social
Security - has fallen by 3.2 percent since President Obama took office in
January 2009, according to the Commerce Department’s Bureau of Economic
Analysis...
Two
of the most populous states in the country reported dramatic declines: Per
capita income in California dropped 3.5 percent to $42,325; in New York, the
drop was 3.8 percent to $46,957.
“The
evidence from New York and California reinforces a basic lesson: Where
government gets too large, prosperity suffers. Let’s hope that the
Congress learns this lesson before it is too late for the country as a
whole,” said Mr. Holtz-Eakin, who also served
as chief economic policy adviser to Sen. John McCain’s 2008
presidential campaign...
[Read
more]
4/13/2010: Incentives
Not to Work
Larry Summers v. Senate
Democrats on jobless benefits.
“The second way
government assistance programs contribute to long-term unemployment is by
providing an incentive, and the means, not to work. Each unemployed person
has a ‘reservation wage’—the minimum wage he or she insists
on getting before accepting a job. Unemployment insurance and other social
assistance programs increase [the] reservation wage, causing an unemployed
person to remain unemployed longer.”
Any
guess who wrote that? Milton Friedman, perhaps. Simon Legree?
Sorry.
Full
credit goes to Lawrence H. Summers, the current White House economic adviser,
who wrote those sensible words in his chapter on “Unemployment”
in the Concise Encyclopedia of Economics, first published in 1999.
Mr.
Summers should give a tutorial to the U.S. Senate, which is debating whether
to extend unemployment benefits for the fourth time since the recession began
in early 2008. The bill pushed by Democrats would extend jobless payments to
99 weeks, or nearly two full years, at a cost of between $7 billion and $10
billion. As Mr. Summers suggests, rarely has there been a clearer case of
false policy compassion…
Democrats are slowly
converting unemployment insurance into a welfare program…
In any case, no one should be surprised that when
you subsidize people for not working, more people will choose not to work.
[Read
More]
4/13/2010: The
Defense of Self and Nations by Mike Adams
Whom would you rather have
protecting your family and nation? Rambo? Or Bambi? – Jason Mattera, author of Obama Zombies.
With
each passing day it’s become easier and easier to doubt the depth of
Barack Obama’s Christian faith. If we put aside his outright hostility towards
Israel there is another glaring clue that reveals his personal worldview as
one fundamentally at odds with the Judeo-Christian worldview. Obama revealed
that clue with an announcement regarding a new defensive strategy for dealing
with non-nuclear nations.
The
notion of stating up front that the U.S. will not use nuclear weapons in
response to a biological or chemical attack at the hands of a non-nuclear
nation is predicated upon the liberal assumption that making nice promises
assures that others will reciprocate by behaving nicely. But those with a
realistic view of human nature realize such a strategy makes about as much
sense as promising to levy a petty fine in response to grand larceny. It also
makes as much sense as reserving the punishment of death for the taking of a
life and withdrawing it for “lesser” crimes like rape.
Of
course, it isn’t enough to criticize the president for his
naiveté without offering clear instructions on how to deal with
dangerous enemies. So I would like to offer some advice based on my
experiences in dealing with unhinged liberals who read my columns and
mistakenly assume that threats of violence will deter me from exercising my
constitutional rights.
1. A man must always
make his enemies aware of his defensive capabilities.
Several
months ago, a man whom we will call Steve – because that is, in fact,
his name – emailed me in response to one of my columns, which dealt
with bi-polar disorder. I argued that a lot of people who claim to be
bi-polar use the illness to excuse behaviors that arise from a simple lack of
self-control. Steve, who suffers from bi-polar disorder, responded by saying
“I will kill you.” I responded by listing the full range of guns
in my arsenal and then asking him which gun he would like me to point at him
when he attempted to kill me.
2. A man must always
make his enemies aware of his willingness to use his defensive capabilities.
After
I emailed Steve – a 41-year old who resides in Topeka, Kansas –
with a detailed list of my defensive capabilities I asked him a very polite
question. Specifically, I asked him how he would prefer to be incapacitated
in the event that he made an attempt on my life. I politely offered him the
choice between a quick shot to the cranium or a shot to the midsection, which
might prove to be a slower and more painful way of incapacitating him. I
noted, of course, that the latter option would reduce the chances of
collateral damage. That’s an important liberal consideration I wished
to accommodate fully.
3. A man must always communicate
to his enemy the course of action required to avoid a potentially lethal
confrontation.
After
Steve was given the choice of a head shot and a body shot (in defensive
response to an attempt on my life) he wisely responded with the following:
“I let my anger get the best of me. I am sorry.”
That
really proved my point about people with bi-polar disorder. There is no
excuse for making threats on people’s lives – even if you suffer
from such an illness. And medication is not the only thing that can be used
to check the behavior of someone suffering from mental illness. That should
provide “hope” for a president wishing to “change”
the behavior of the presidents of Iran and North Korea.
I
concluded my discussion with Steve by telling him, not asking him, that he
would never under any circumstances communicate with me again – now
that I had employed the services of an internet security expert to identify
his name, date of birth, and the precise location from which he issued his
threat of violence.
For
nearly six months, Steve and I have been at peace. I predict the peace will
be long-lasting.
Barack
Obama’s father did not stay around to raise him. Instead, the president
was raised by a woman who taught him that misunderstandings, being the root
of all conflict, can be cured by mere negotiation. The president needs the
advice of men with experience in conflict resolution – men who
recognize that the world is full of those not interested in peaceful
negotiation. I offer this column in the hopes of fulfilling that need.
Let
us hope the president takes my advice, which is guaranteed to preserve the
peace. Jesus would not have it any other way. He was the Prince of Peace, not
the Prince of Appeasement. The two are not the same and should never be
confused.
4/11/2010: Facing
Up to a Pension Crisis
by George Will
WASHINGTON
-- A puzzle from Philosophy 101: If a tree falls in a forest and no one hears
it, does it make a sound? A puzzle from the prairie: If an earthquake occurs
in Illinois and no one notices, is it really a seismic event?
Gov.
Pat Quinn called it a “political earthquake” when the
state’s Legislature recently voted -- by margins of 92-17 in the House
and 48-6 in the Senate -- to reform pensions for state employees. There is
now a cap on the amount of earnings that can be used as the basis for
calculating benefits. In some states, employees game the system by
“spiking” their last year’s earnings by accumulating vast
amounts of overtime pay.
An
even more important change -- a harbinger of America’s future -- is
that most new Illinois state government employees must work until age 67 in
order to be eligible for full retirement benefits. Those already on the state
payroll can still retire at 55 with full benefits.
The
1935 Social Security Act established 65 as the age of eligibility for
payouts. But welfare state politics quickly becomes a bidding war, enriching
the menu of benefits, so in 1956 Congress entitled women to collect benefits
at 62, extending the entitlement to men in 1961. Today, nearly half of Social
Security recipients choose to begin getting benefits at 62. This is a
grotesque perversion of a program that was never intended to subsidize
retirees for a third to a half of their adult lives.
It
also reflects the decadent dependence that the welfare state encourages:
Because of the displacement of responsibility from the individual to
government, 48 percent of workers over 55 have total savings and investments
of less than $50,000.
Because
most states’ pension plans compute their present values -- and minimize
required current contributions -- by assuming an unrealistic 8 percent annual
return on investments, the cumulative funding gap of state pensions already
may be $3 trillion, and certainly is rising. For example, last
Wednesday’s New York Times contained this attention-seizing bulletin:
“An independent analysis of California’s three big pension funds
has found a hidden shortfall of more than half a trillion dollars, several
times the amount reported by the funds and more than six times the value of
the state’s outstanding bonds.” It is not news that California is
America’s home-grown Greece, but the condition of the three funds,
which serve 2.6 million current and retired public employees, is going to
exacerbate the state’s decline by requiring significantly higher
taxpayer contributions.
A
recent debate on “Fox News Sunday” illustrated the differences
between the few politicians who are, and the many who are not, willing to
face facts. Marco Rubio, the former speaker of Florida’s House of
Representatives who is challenging Gov. Charles Crist
for the Republican U.S. Senate nomination, made news by stating the obvious.
Asked
how the nation might address the projected $17.5 trillion in unfunded Social
Security liabilities, Rubio said we should consider two changes for people 10
or more years from retirement. One would raise the retirement age. The other
would alter the calculation of benefits: Indexing them to inflation rather
than wage increases would substantially reduce the system’s unfunded
liabilities.
Neither
idea startles any serious person. But Crist, with
the reflex of the unreflective, rejected both and said he would fix Social
Security by eliminating “waste” and “fraud,” of which
there is little. The system’s problems are the result not of
incompetent administration but of improvident promises made by Congress.
Synthetic
indignation being the first refuge of political featherweights, Crist’s campaign announced that he believes
Rubio’s suggestions are “cruel, unusual and unfair to seniors
living on a fixed income.” They are indeed unusual, because flinching
from the facts of the coming entitlements crisis is the default position of
all but a responsible few, such as Wisconsin’s Rep. Paul Ryan, who has
endorsed Rubio. What is ultimately cruel is Crist’s
unserious pretense that America faces only palatable choices, and that
improvident promises can be fully funded with money currently lost to waste
and fraud.
By
the time the baby boomers have retired in 2030, the median age of the
American population will be close to that of today’s population of
Florida, the retirees’ haven that is Heaven’s antechamber. The
38-year-old Rubio’s responsible answer to a serious question gives the
nation a glimpse of a rarity -- a brave approach to the welfare state’s
inevitable politics of gerontocracy.
Finally something we can all use!
First came the commemorative coins,
then the T-shirts, and then the plates..
Now, something for the rest of us...
Use
caution...it may irritate your ass!
4/4/2010: Ballot
vs. the Bench -- Why Sacramento Stumbles
A Commentary by Debra J. Saunders
Here
is why it is nearly impossible to fix the state budget.
This
story starts in December 2008. Facing a $42 billion budget shortfall, Gov.
Arnold Schwarzenegger issued an executive order to create two furlough days
per month for the state’s 238,000 employees. (Be it noted that
Schwarzenegger essentially has two tools -- furloughs and layoffs -- that he
can use unilaterally to cut spending.) In July, Schwarzenegger added a third
day. The Legislature passed budgets with the Schwarzenegger furloughs.
Of
course, public employee unions have challenged the furloughs, which is their
right. State employees have had to endure a painful 14 percent pay cut.
Here’s
the problem. State employee unions have filed not one, but at least 25
lawsuits against the furloughs.
Early
on, Sacramento Superior Court Judge Patrick Marlette ruled that the governor
had the authority to impose temporary furloughs.
No
worries; labor groups filed suits in different courts presenting various
arguments against the furloughs. They eventually found judges who ruled in
their favor. Some might call this “judge shopping.”
SEIU
attorney Felix De La Torre disagrees. “If there is any forum-shopping
happening,” he said, “it probably is from the governor’s
office” trying to redirect cases to Marlette.
De
La Torre also argued that a number of these furloughs “make no
sense.” Some needlessly hurt employees not paid through the
state’s General Fund. Agencies like the Employment Development
Department need more people, not fewer. And: “You cannot separate a
furlough from a reduction in services.”
Apparently,
Alameda County Superior Court Judge Frank Roesch
agreed. In December, Roesch declared that furloughs
for some 65,000 employees, whose departments are financed out side the
General Fund, violate a law that sets the state employees’ workweek at
40 hours. He issued an order last month to end Furlough Fridays for those
workers.
An
appellate judge stayed the stay -- so furloughs are still happening.
Meanwhile,
the legal bills mount. Department of Personnel Administration of spokesperson
Lynelle Jolley figures
the state has spent $590,000 thus far on outside attorneys -- and that does
not include the court costs for processing this bounty of litigation. Thus,
Schwarzenegger asked the California Supreme Court to consolidate seven of the
lawsuits and rule on them promptly.
Even
though the furloughs in question are scheduled to end June 30, the court
should step in, as California cannot afford this uncertainty. For one thing, Roesch also has ruled that the state owes back pay --
some $600 million -- to the 65,000 employees. Should the state’s big
bench rule against all the furloughs, the state could be forced to pay out
about $3 billion, according to Schwarzenegger spokeswoman Rachel Arrezola.
As
a taxpayer, I hope that when these cases are settled, the bench does not
overrule the furloughs. But if the court is going to do so, better sooner
than later, given that Sacramento will have to find other means to balance
the budget, and fill the current $20 billion shortfall.
The
money will have to come from somewhere.
Think
higher taxes. An SEIU brief berates “the governor’s unreasonable insistence
to avoid tax increases to pay the judgment and to keep the state services
intact.”
Do
you get the distinct feeling that the unions are arguing that, while the
California public may be subject to the laws of supply and demand, state
workers are not and the taxpaying public better get used to it?
Indeed,
the SEIU brief argues that, should the governor lay off employees, “the
layoffs themselves would be subject to an injunction and back wages” as
layoffs themselves should be considered an act of retaliation, for which --
oh, joy -- they can sue all over again.
In
short, whatever Sacramento does to cut spending, big labor will turn into the
subject of lengthy litigation -- with federal courts acting as wild cards
that order do-over budgets by fiat.
De
La Torre was passionate in arguing that if workers’ rights are
violated, they are entitled to a remedy. But his line of argument suggests
that as agents of the government, state employees have rights -- no pay cuts
or layoffs -- that the taxpaying public does not have.
The
only right you have, serf, is to pay for it.
COPYRIGHT
2010 CREATORS.COM
Views
expressed in this column are those of the author, not those of Rasmussen
Reports.
Rasmussen
Reports is an electronic publishing firm specializing in the collection,
publication, and distribution of public opinion polling information.
The
Rasmussen Reports Election Edge™ Premium Service offers the most
comprehensive public opinion coverage available anywhere.
Scott
Rasmussen, president of Rasmussen Reports, has been an independent pollster
for more than a decade.
4/2/2010: Obamacare
was mainly aimed at redistributing wealth by Byron York
[These unusually candid (and after-the-fact)
admissions by some “Democrats” show that they really are
“Socialists” (a socialist is “someone who has nothing and
wants to share it with everyone else”). Unfortunately, many
“Republicans” are socialists, too. They just pretend to believe
in private property and free markets.
And while not the point of the article, the
unnamed “Democratic strategist” who denies that heath care
finance reform is about wealth redistribution says, “That’s what
the tax code is for.” Sadly, he is correct, if somewhat naïve. The
vast majority of government activity at all levels is nothing but income and
wealth redistribution: Social Security, Medicare, Medicaid, welfare in all
its myriad forms, agricultural supports, clean energy subsidies, ethanol
subsidies, mortgage guarantees, bank bailouts, etc. But the biggest income
redistribution of all is from taxpayers to politicians, government employees,
and their unions. If there weren’t so much wealth distribution, there
wouldn’t be so many lobbyists.]
It
hasn’t attracted much notice, but recently some prominent advocates of
Obamacare have spoken more frankly than ever before about why they supported
a national health care makeover. It wasn’t just about making insurance
more affordable. It wasn’t just about bending the cost curve. It
wasn’t just about cutting the federal deficit. It was about
redistributing wealth.
Health
reform is “an income shift,” Democratic Sen. Max Baucus said on
March 25. “It is a shift, a leveling, to help lower income, middle
income Americans.”
In
his halting, jumbled style, Baucus explained that in recent years “the maldistribution of income in America has gone up way too
much, the wealthy are getting way, way too wealthy, and the middle income
class is left behind.” The new health care legislation, Baucus
promised, “will have the effect of addressing that maldistribution
of income in America.”
At
about the same time, Howard Dean, the former Democratic National Committee
chairman and presidential candidate, said the health bill was needed to
correct economic inequities. “The question is, in a democracy, what is
the right balance between those at the top ... and those at the
bottom?” Dean said during an appearance on CNBC. “When it gets
out of whack, as it did in the 1920s, and it has now, you need to do some
redistribution. This is a form of redistribution.”
Summing
things up in the New York Times, the liberal economics columnist David
Leonhardt called Obamacare “the federal government’s biggest
attack on economic inequality since inequality began rising more than three
decades ago.”
Now
they tell us. For many opponents of the new legislation, the statements
confirmed a nagging suspicion that for Barack Obama and Democrats in
Congress, the health fight was about more than just insurance -- that
redistribution played a significant, if largely unspoken, part in the drive
for national health care.
“I
don’t think most people, when they think of the health care bill,
instantly think it’s a vehicle to redistribute wealth,” says pollster
Scott Rasmussen. “But we do know that people overwhelmingly believe it
will lead to an increase in middle class taxes, and we do know that people
are concerned that it will hurt their own quality of care, so I think their
gut instincts point in that direction.”
By
talking openly about redistribution, Baucus and others have gone seriously
off-message. Democrats knew there was no way they could ever sell a national
health care bill to a skeptical public by basing their case on income
inequality. That’s one reason they went to such lengths to argue --
preposterously, in the view of most Americans -- that the bill could cover 32
million currently uninsured people and still save the taxpayers money.
After
Baucus’ statement, I asked a Democratic strategist (who asked to remain
nameless) whether fighting income inequality was one of his goals in
supporting the legislation. Never, he said. “That’s what the tax
code is for.”
“It
was not to take something away from rich people, it was to provide something
to people without coverage,” he continued, making a distinction between
striving for universal coverage and seeking to redistribute income. But he
quickly saw that Democrats talking about redistribution could be politically
damaging, echoing the controversy that erupted when candidate Obama famously
told Ohio plumber Joe Wurzelbacher that “when
you spread the wealth around, it’s good for everybody.”
“
‘Redistribution’ is an easy charge to make,” the Democrat
said. “I’m not surprised that it’s an argument critics
make; what I’m surprised at is that Democrats are making it.”
This
week the DNC group Organizing for America offered a commemorative certificate
to supporters who helped pass the health care bill. The certificate said,
“We achieved the dream of generations -- high-quality, affordable
health care is no longer the privilege of a few, but the right of all.”
The
privilege of a few? It is widely accepted that about 85 percent of all
Americans have health care coverage, and the overwhelming majority are happy
with it. There’s simply no way anyone could plausibly claim that health
coverage is the privilege of a few.
And
yet that is the bedrock belief of some who supported the health care
makeover. So it’s no wonder that we’re hearing about health care as
the redistribution of income. Of course, we’re only hearing it after
the bill has passed.
Byron
York, the Washington Examiner’s chief political correspondent, can be
contacted at byork@washingtonexaminer.com. His column appears on Tuesday and
Friday, and his stories and blog posts appears on www.ExaminerPolitics.com
ExaminerPolitics.com.
Read
more at the Washington Examiner
4/1/2010: [California is] No. 1 in all
the wrong ways
California,
which has the nation’s highest state sales tax, 8.25 percent, and is
close to the top in total tax burden, also was in first place last year with
the biggest tax increases. Nobody else even came close.
A
survey by the National Conference of State Legislatures shows that combined,
the states increased taxes by $28.6 billion. Of that amount, California alone
accounted for $12 billion.
The
shocking fact is that if voters hadn’t resisted, California would have
raised taxes by $28 billion, or as much as all the other states combined. But
as the Orange County Register pointed out, the state politicians’
“solution” to revenue shortfalls lost at the polls by a margin of
2 to 1.
With
that rejection in mind, state politicians have some very serious thinking to
do in the next budget go-around. They will face a revenue shortfall of $25
billion, which is too big a hole to fill with money-shuffling tricks and
other short-term patches.
We
won’t see many intelligent responses to this issue until the current
election cycle is finished. Even candidates who present themselves as
fiscally conservative have avoided specific commitments to making the huge
cutbacks that must be made.
Less
conservative types persist in describing the state’s financial mess as
a revenue problem, which it cannot be as long as voters are smart enough to
refuse to come up with more cash. It is a spending problem, relatively
permanent, and unyielding to an uptick in the economy even if any upticks
were in sight.
They
aren’t. This means state government needs restructuring that will
include the unpleasant task of eliminating jobs and reducing compensation.
Furloughing
state workers, which already has begun, is just a temporary measure and it
impacts services that taxpayers want. A less brutal way to cut costs would be
to create a two-tiered compensation plan for future workers, although the
benefits would be too remote to solve the immediate shortfalls.
As we’ve said before,
government salaries have ratcheted upward for political reasons until they
new exceed those in the private sector, and public pensions are even further
out of line. This is where costs can be reduced without cutting into basic
services.
This presents an opportunity for
whoever becomes the state’s next governor. California can become known
not just as the state with the biggest tax increases and the worst financial
problems, but as the state that can lead the way toward sound governance and,
once again, prosperity.
California
voters have shown they can be tough on tax increases, thankfully. But they
also have been willing to approve spending, borrowing or even tax increases
when they believe it is in the interest of not just politicians, but all
Californians.
That will
take leadership, and that’s where California should become No. 1.
4/1/2010: Washington Wants a
VAT… What They Need is a Twelve Step Program
By Dave Cribbin
[I wish this were an April Fool’s Joke but
it ‘s not; our politicians’ greed and lust for power have no
bounds. Obama/Pelosi/Reid and the Social Democrats probably think they can
ram this through Congress before the November elections and the Social
Republicans will never roll repeal it. They, too, are addicted to spending
and taxes.]
After
passing the healthcare bill that raises taxes on earned income, dividends,
suntans, medical devices, capital gains, and pharmaceutical companies, not to
mention the cost of health insurance for those of us able to afford it as
well as those who can’t, you may be asking what Congress plans to do as
an encore.
Well,
just like the drunk who has been on a three day bender, they’re going
to reach for another nip of their favorite hooch, another shot of taxes so to
speak. Just so they don’t leave anything out this time, their next tax
will be on everything. That’s right, the same folks who are bringing European
style health care to America are beginning to talk up that other European
favorite: the Value Added Tax as a way to pay for their unbridled expansion
of the welfare state.
What’s
a Value Added Tax (VAT) you ask? Well, like I said, it’s a Tax on
everything:
“The
VAT is a tax assessed and collected on the value of goods or services that
have been provided every time there is a transaction (sale/purchase). The
seller charges the VAT to the buyer, and the seller pays this VAT to the
government. If, however, the purchaser is not an end user, but the goods or
services purchased are costs to its business, the tax it has paid for such
purchases can be deducted from the tax it charges to its customers. The
government only receives the difference, in other words, it is paid tax on
the gross margin of each transaction, by each participant in the sales
chain.”
It’s
looking like 2010 may yet be the year we try to tax ourselves into
prosperity. You can do that, can’t you? Just think of how much better
off you’ll be once this new tax is imposed; think of all the additional
revenue your government will be able to squeeze out of you. The proponents of
the VAT say it will enable us to once again restore order to our fiscal house
and close the gaping trillion + dollar hole that they’ve created
between what the government collects in tax revenue each year and what it
spends. Won’t that be great? Can’t wait till it happens, right?
Well, don’t hold your breath. The VAT won’t even come close to
living up to it’s advance billing. How do I know this, you ask? Just
have a look at the current budget deficits of any of the European governments
who already have a VAT Tax.
According
to the European Commission, the average budget deficit for 2010 will likely be
7.5% of GDP, a percentage point or two below what the US deficit will be
without a VAT. As we’ve seen, folks drunk with power, just like those
overly lubricated with alcohol, can make all kinds of promises that are
quickly forgotten as soon as they need their next drink. I’m sure you
recall that no one making less than $200,000 would pay a nickel more in taxes
and that health care reform would reduce the cost of health care. If
eliminating the deficit was really a national priority, the folks who decide what
the government is going to spend each year would be in a massive belt
tightening mode; but government giving up the sauce just isn’t in the
cards. Instead, their attitude is why should we cut our budgets, when it is
within our power to make you cut yours?
So,
if it won’t do away with the deficit, and it’s as unlikely to
restore fiscal discipline in Washington, as one more drink is to sober up the
drunk, then what can we expect from the VAT tax, aside from more welfare
programs? For starters, you can expect to pay higher prices for everything
you purchase, and as a result of increasing the price of everything, you
should expect the demand for everything to fall and along with it the volume
of all goods and services produced. How many additional employees do you need
to produce less? This sounds to me like a recipe for an economy on the rocks,
with even higher unemployment than we are currently choking on. Maybe we can
make our chronic unemployment rate permanent like our brothers and sisters in
Europe have done. They seem to have gotten used to a rate that is two to
three times what our unemployment rate has averaged over the past twenty
years. Perhaps it’s an acquired taste, like scotch or gin?
Don’t
worry you say, the President’s Budget Commission is sure to deal with
the deficit. Don’t kid yourself! The President’s new Budget
Commission is just a diversion from reality. It is but a group of stammering,
stuttering politicians who will will seek to
convince you just how sober they are; whose pretense will be to convince you
and me that there is just no way to cut government spending any further, and
the only way out of the nation’s fiscal troubles is to raise more
revenue. After all, everyone knows Obama has frozen the spending on 13% of
the budget already; so what else is there left to do?
What
our representatives fail to see is that the way out of a spending problem is
to stop spending, just like the way out of a drinking problem is to stop
drinking. But we all know addictions can be difficult to break, and sometimes
you have to hit bottom before you can admit you actually have a problem and
seek help. I’m thinking that their political bottom is coming, and
they’ll be free to spend some much needed time in rehab, come November.
Dave
Cribbin, President of Tailwind Capital, is a
Liberty Features Syndicated writer for Americans for Limited Government.
4/1/2010:
“Democrats last week began a well-orchestrated campaign to change the
subject from Obamacare by declaring Republicans the newest terrorist threat.
House Majority leader Steny H. Hoyer claimed that
Democrats faced threats of violence in their home districts. He demanded that
Republicans take a stand against it. ‘Silence gives consent,’
added Majority Whip James E. Clyburn, who accused Republicans of ‘aiding
and abetting this kind of terrorism.’ Democrats promptly exploited
their own fear-mongering by rushing out a fundraising letter.
Meanwhile, a shot was
fired through the window of Republican House Minority Whip Eric
Cantor’s Richmond office. Instead of attempting to fill his campaign
coffers over the incident, Mr. Cantor denounced Democratic recklessness in
creating ‘media vehicles for political gain.’ To hear Mr. Clyburn
talk, you’d think the Capitol had been bombed -- like President Obama’s
spiritual mentor Bill Ayers and the Weather Underground did in 1971 or the
communist Revolutionary Fighting Group did in 1983. We don’t recall
Republicans placing the blame on Democrats for those bona fide terror attacks
committed by the Democrats’ ideological cousins. For the party’s
leaders to make such insinuations now rings hollow.
The Democrats and their
supporters have consistently demeaned and mischaracterized the broad,
nationwide, nonviolent grass-roots movement that arose in opposition to their
radical agenda. A willing press establishment relays baseless claims that
these protesters are violent uncritically and without investigation. ...
Any leftist thug is now
free to toss a brick through a Democratic congressional district office
window secure in the knowledge that the act of vandalism will be blamed
automatically on Tea Partiers or Republicans. Such hoaxes are tickets to
instant press coverage. ... This victimization sideshow is meant to hide the
fact that Democrats are pursuing policies that the American people oppose,
and they are beginning to face a political price.” --The Washington
Times
4/1/2010: April Fools’
Day…a perfect day to remember B. Hussein Obama, Nancy Reid, and Harry
Pelosi. Perhaps, in honor of Madame Speaker, they should tax botox instead of tanning salons.
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