Wonderboy's Curious & Selective Sense of History

Tuesday's Wall Street Journal included an interesting piece by Fouad Ajami, director of Middle East Studies at The Johns Hopkins School of Advanced International Studies, entitled Obama's Presidency Joins the Fray.

Mr. Ajami provided an very insightful view into Wonderboy's warped and biased use of history while president. For example, the First Rookie dismissed parallels between Afghanistan and Vietnam, because he declared himself to be young enough not to have 'baggage' from the latter US involvement.

The current US president then selectively took the comparisons to JFK and FDR which he likes, but eschewed JFK's combat experience and tough-minded attitudes on defense and anti-communism.

Ajami reminds us of Wonderboy's self-description, in Cairo, "as a student of history," thus making his selective attention to it the more troubling. One suspects the only history in which the president is interested is his own, so expansively detailed in his many autobiographies.

How does one write so much about a life devoid of real accomplishment, outside of, with a nod to that other Illinois resident who became president, 'fooling some of the people some of the time?'

Mr. Ajami writes,

"our president would have known that a command economy is alien to the American temperament, that unfettered government spending was bound to arouse the antagonism of the American people...."

He concludes by contending that "the real Obama presidency has just begun."

Many believe Wonderboy will now tack to the center and effect a self-rescue. No less an esteemed conservative pundit than Charles Krauthammer seems to believe this.

Personally, I don't see it like that. I just don't think Wonderboy has it in him to be another Clinton. Clinton was never an ideologue, whereas that's all Wonderboy really seems to be. And a self-involved, self-referential, egotist, at that.

But, as Mr. Ajami suggests, we'll have the next two years to find out if the current Oval Office occupant really understand history, or cares.

Biggs, Hassett & Jensen On Budget Balancing

Three people from the American Enterprise Institute wrote an impressive piece in yesterday's Wall Street Journal entitled The Right Way to Balance the Budget.

As I noted in yesterday's post concerning Howard Dean's recent delusional rant on CNBC, it's not simply a matter of tax hikes or spending cuts being apparently arithmetically equal. The authors begin,

"In new research that builds on the pioneering work of Harvard economists Alberto Alesina and Silvia Ardagna, we analyzed the history of fiscal consolidations in 21 countries of the Organization for Economic Cooperation and Development over 37 years. Some of those nations repaired their fiscal problems; many did not. Our goal was to establish a detailed recipe for success. If the United States were to copy past consolidations that succeeded, what would it do?



The data also clearly indicate that successful attempts to balance budgets rely almost entirely on reduced government expenditures, while unsuccessful ones rely heavily on tax increases. On average, the typical unsuccessful consolidation consisted of 53% tax increases and 47% spending cuts.

By contrast, the typical successful fiscal consolidation consisted, on average, of 85% spending cuts. While tax increases play little role in successful efforts to balance budgets, there are some cases where governments reduced spending by more than was needed to lower the budget deficit, and then went on to cut taxes. Finland's consolidation in the late 1990s consisted of 108% spending cuts, accompanied by modest tax cuts."

That's pretty riveting. No qualitative arguments about income redistribution philosophy. Instead, it's black and white. Raise taxes and you'll fail to regain fiscal integrity. Cut spending, and you may. They continue,



"Consistent with other studies, we found that successful consolidations focused on reducing social transfers, which in the American context means entitlements, and also on cuts to the size and pay of the government work force. A 1996 International Monetary Fund study concluded that "fiscal consolidation that concentrates on the expenditure side, and especially on transfers and government wages, is more likely to succeed in reducing the public debt ratio than tax-based consolidation." For example, in the U.K's 1997 consolidation, cuts to transfers made up 32% of expenditure cuts, and cuts to government wages made up 21%.


Likewise, a 1996 research paper by Columbia University economist Roberto Perotti concluded that "the more persistent adjustments are the ones that reduce the deficit mainly by cutting two specific types of outlays: social expenditure and the wage component of government consumption. Adjustments that do not last, by contrast, rely primarily on labor-tax increases and on capital-spending cuts."



The numbers are striking. Our research shows that the typical successful consolidation allocates 38% of the spending cuts to entitlements and 25% to reductions in government salaries. The residual comes from areas such as subsidies, infrastructure and defense."

Again, very deterministic evidence. And sensible. Cutting recurring government spending, e.g., salaries/jobs, is a recurring benefit to fiscal rectitude. Cutting entitlements gets at the heart of why, as I argued in yesterday's post, we arrived here in the first place. Spending on promises that never should have been made in the flawed manner that they were, with no contingent limits.

The editorial's authors conclude,


"Why is reducing entitlements and government pay so important? One explanation is that lower social transfers spur people to work and save. Reducing the government work force shifts resources to the more productive private sector.


Another reason is credibility. Governments that take on entrenched, politically sensitive spending show citizens and financial markets they are serious about fiscal responsibility.


While tax hikes slow revenue growth, policies that credibly reduce government spending in the long run boost economic growth by more than their simple effects on deficits might imply. Any attempt to address the federal government's budget shortfall that relies on less than 85% spending cuts runs too large a risk of failure. The experience of so many other countries shows that it's crucial for the U.S. to get this right."



That's another hard datapoint. The federal government needs to be cutting spending to the tune of 85% of the gap needed to be closed. That leaves precious little for tax increases.

Perhaps the new GOP House is up to the task. Let's hope so. We may not have a second chance at this.

Howard Dean's Taxation Delusions On CNBC

I happened to view an exchange this morning on CNBC between former CBO head Douglas Holz-Eakins and former Vermont governor and DNC chair Howard Dean. It was most illuminating.

In a discussion regarding fiscal responsibility and tax policies, Dean railed against 'giving tax cuts to the rich' while borrowing the money for them from China.

It was truly laughable that Dean didn't see the warped perspectives embedded in his comments. To wit, Dean, being an uber-liberal, naturally assumes all of your income is, in reality, the government's. Letting you keep any of it is a gift for which you should be on bended knee, kissing the feet of your political masters.

Thus, letting you keep any more of your income than you already do, while liberals- and conservatives- spend more than the government collects in taxes, and cover the difference by borrowing from our enemies, like China, is considered folly by said uber-liberals, Dean included.

When confronted by co-anchor Joe Kernen and Holz-Eakins with the reality that soaking the income of the upper percentiles of income-earners still only generates about $94B, assuming no changes by said wealthy in declared income, against the trillions in deficits, Dean only continued to wail that we were borrowing from the Chinese to 'give tax breaks to the rich.'

Standard far-left stuff, but ludicrous when contrasted with the fact that all of the incomes of the wealthy still won't make a dent in the spending binge on which our liberal Democratic Congress and Wonderboy have been.

If you think about it, aren't our wealth-transfer payment programs the ones which are deemed 'non-discretionary' and breaking our budgets? Social Security, Medicare, Medicaid, and related transfers, enacted with no global or macro budgetary conditionality? As communal, unlimited spending pots, the withdrawals from which are on individual eligibility bases, not apportioned and pro-rated based upon budgetary limitations?

It's ridiculous! Thanks to Congressional idiocy in the 1930s and 1960s, we've elevated the poor and destitute ahead of every other need of our Republic. They never are required to share in the economies and belt-tightening shared by our other national governmental spending and taxation realities.

I don't think I've ever seen so clear a picture of the nonsensical liberal ethos and belief system than in Howard Dean's hysterically comical attitude and comments this morning on CNBC. It was straight out of Socialism 101.

'All income belongs to the people. The government is the people. The poor receive first consideration for spending by the government, on behalf of the people, i.e., the government.'

The actual value-producing income-earners are simply presumed to be fatted cattle to be milked and, in time, through death taxes, slaughtered for the benefits of the non-working and/or poor.

More Horrific State Budget Games

The Manhattan Institute's Steven Malanga wrote a chilling editorial in last Friday's Wall Street Journal entitled State House Shell Games.

In it, he detailed the budgetary games US states have played to fool voters while continuing to spend beyond their means. For example, apparently federal funds for upgrading 911 emergency systems is a fairly common source for misallocation of resources. These funds are used for other purposes with seeming impunity.

Then there are cases of states like Arizona mortgaging its government buildings in such a way as to effect a 'sale' which escapes constitutional strictures. Then there's New York State, where, according to Malanga, one-third of the bridge and highway trust fund is being used to pay state debt service.

Essentially, writes Malanga, states are using elaborate shell games to shift funds inappropriately among various special purposes and their general funds, the better to obscure the true indebtedness of said states.

California's Schwarzeneggar promised that $10.9B in deficit bonds issued early in his governorship would be the ticket to his state's budget woes. Instead, the legislature and governor simply went on spending, leaving the state with a current $25B budget shortfall over the next year and a half.

Voters are beginning to notice. Even my liberal Democratic squash partner voiced alarm after seeing Meredith Whitney's recent appearance on CBS' '60 Minutes.' For a guy who never saw a spending program he didn't like, he's truly fearful that some states, like ours, won't be able to fund all of their liabilities.

Seems like the endgame on state budget tricks and deficits, in defiance of notional balanced budget rules, is coming soon.

Impeachable New Start Behavior By Reid & Wonderboy?

I'm beginning to think that Harry Reid, Wonderboy and all the Senators voting to rush the flawed New Start nuclear weapons treaty through a vote in this lame duck session should be impeached.

After all, are they not violating their oaths to uphold the Constitution, meaning  "preserve, protect and defend the Constitution of the United States," including, one supposes, the part about "provide for the common defense."

By rushing this treaty through a lame duck session and denying it appropriate time for debate, these office-holders are effectively abdicating their responsibilities.

And what about China? Why is such a treaty only with Russia? Is equal effort being expended on similar efforts with the Chinese? If not, isn't it nutty to only deal with Russia, possibly dealing away our rights to missile defense systems by virtue of an agreement with only one other nation?

So much about this thing smells that it just seems wrong to ratify it. Certainly not in a lame duck session when so many Senators won't be around in two weeks. And with insufficient time for debate and public reaction.

I can't really believe our nation has come to the point of twisting Congressional rules to ram a bloated, unaffordable healthcare bill through, then add insult to injury by doing the same with a treaty that helps to strip away our defenses.

The Chinese must be laughing themselves silly, believing Christmas is especially fruitful this year.

Subsequent Congresses may be capable of reversing the health care fiasco, but I don't know that they will be able to undo the damage done by ill-considered ratification of this treaty.

The Final Tax Deal & Wonderboy's New Image

Much is being made by pundits as solidly conservative as Charles Krauthammer that Wonderboy's 11th hour tax deal will reposition him to the center of the political spectrum and perhaps even salvage his 2012 re-election prospects.

I confess to having difficulty sharing Mr. Krauthammer's conviction on this point.

It seems that polling done just after the actual signing showed the First Rookie's approval rating was up significantly. And then there's the usual spiel that the far-left has nowhere to go, so there won't really be an ultra-liberal challenge to Wonderboy for his re-nomination.

Is it really going to be so easy for the president to wipe out two years of liberal ideology, budget-busting behavior and general philosophy of saddling working voters with ever-more costs of supporting their non-working fellows? Will voters really forget Wonderboy's snarky initial press conference on the tax deal, wherein he castigated all other parties to the negotiations?

I just don't think so. He's on record as hating those voters who succeed financially, and I just don't see him retracting those views. He signed the bill because to veto it would have encumbered him with the clear label of raising taxes and weakening the economy. But that doesn't mean he liked it, or will suddenly change his stripes.

We have a year ahead in which to see how Wonderboy maneuvers against a Republican-led House bent on curtailing the implementation of Obamacare and, generally, slowing down this administration's attempts to govern by agency rule-making.

I don't think the First Rookie can hold his temper and tongue in check for that long. Especially as he begins his own re-nomination campaign.

Sarah Palin Backs Paul Ryan's "Roadmap"

Sarah Palin's plans to eventually run for the Republican presidential nomination were reinforced with her Wall Street Journal editorial on December 10th endorsing Wisconsin Republican Representative Paul Ryan's Roadmap for America's Future.

By contrasting Ryan's Roadmap with the recent Bowles-Simpson Commission's recommendations, Palin hopes to demonstrate an appreciation for the policy nuances contained in both, as well as re-stating her conservative bona fides.

The difference between the two plans is fundamentally ideological. The former attempts to square the deficit circle by jiggering various details of existing programs- social spending and taxation- while Ryan engages in wholesale programmatic changes to provide for more individual responsibility and less borrowing and federal spending.

In fact, Palin does many a service by concisely and clearly re-stating Ryan's recommendations in just a few paragraphs. In doing so, she allies herself with those calling for an overhaul of federal social programs which exhibit such poor, 1930's era design. I've written about this in prior posts.

Social Security is surely one of the most poorly-designed old-age insurance schemes ever. It contains no total spending constraints, employs a single communal pot of so-called assets from which to play uncapped, unlimited claims, and featured no conditional payout changes based on the forecasted financial solvency and sustainability of the program.

This insane model was then carbon-copied for Medicare and Medicaid, when all three could just as easily have been designed as personal, portable defined-contribution schemes.

There's much about Palin that I don't trust in the context of her being president. But her clear-cut explication of Ryan's plan, and solid support of it probably helps the overall GOP presidential primary campaign environment by challenging other candidates to match her unequivocal endorsement of Ryan's Roadmap.

Capping States' Spending: What Works & What Doesn't

Two weekends ago, the Wall Street Journal published a fascinating piece by Matthew Mitchell, "a research fellow at George Mason University's Mercatus Center," entitled How to Control State Spending.

I wouldn't have given this topic much thought, as I assumed that the states which had passed constitutional amendments or had laws to this effect more or less all took the same path. But that's wrong.

Mitchell writes of failures, like Florida, which used a cap based on "the sum total of residents' income" growth.

In contrast, he writes,

"Another variety of TEL (tax-and-expenditure limitation), which limits spending, according to the sum of inflation plus state population growth, has a better record."

Colorado successfully used this approach and is now "experiencing the country's fastest economic growth between 1995 to 2000."

Mitchell continues by observing,

"Six other states have enacted a TEL like Colorado's. My research shows that- after controlling for other factors, including per capita income and the unemployment rate- this type of TEL reduces state and local budgets by 3%."

He mentions three tools with which Florida, and other states, could improve their control over state spending:

-item-reduction veto
-a supermajority requirement for tax increases
-stronger balanced-budget laws and practices.

What's interesting about Mitchell's work, besides the obvious lesson that some approaches to state spending control work better than others, is the lesson of Federalism.

That is, by allowing the 50 states to vary their approaches to problems, it's possible to observe and discover which approaches work best, and, through work like Mitchell's, allow those to be adopted by all interested states.

Yet another reason for a limited Federal government, and more robust, stronger state governments.

And another reason to repeal Wonderboy's draconian, top-down federal health care legislation, in order to allow continued experimentation with solutions at the state level.

Green Energy & Heavy Lifting

Earlier this month, the Wall Street Journal published a review of a book entitled Prime Movers of Globalization, written by Vaclav Smil.

Nick Schulz, the reviewer, puts Smil's book in context with these passages,

"In 1992, Mr. Gore in his book "Earth in the Balance" called for a program that would lead to the engine's elimination by 2017. He believed this was no fanciful goal; it was just a matter of practical engineering harnessed to political will.

Vaclav Smil doesn't mention Mr. Gore.....But somehow I suspect that the Nobel laureate and scourge of fossil-fuel consumption was not far from the author's mind. For if the story of these remarkable machines reveals anything, it is that Mr. Gore's vision is utterly untethered to reality."

Why? For example, Schulz quotes Smil,

"When measured in tons per kilometer, about 94 percent of global trade is now diesel-powered. The cost, efficiency reliability and durability of diesel engines offer a combination that has not been surpassed by any other energy converter."

Smil describes the effects of the gas turbine as "figuratively, the world shrank by half in a single decade." His focus on commercial shipping makes a far different point than that of moving people, i.e., trade and, therefore, wealth, increased at rates otherwise unachievable.

Schulz highlights Smil's point that our current standards of living, expectations of product and service provision, at their current or future, lower prices, are wholly dependent upon diesel-driven machines or their airborne jet counterparts.

Eliminating these literal 'engines of commerce' would not simply clean the air of the world as we now know it. They would clean the air of a world thrown back hundreds of years in terms of wealth, living styles and standards, and so much more. In short, back to an era of burning coal and wood directly at the consumer-level. But, of course, this, too, would be outlawed by the Greens. So you're probably talking about the global population reduced to using dried animal dung.

Besides this reality which is hidden by those who want to eliminate internal combustion engines is the simple fact that no green energy alternative is capable of providing similar raw locomotive power at similar performance specifications. No wind turbine, tidal energy converter or solar cell is going to power a cargo jet from Southeast Asia to America.

Thus, the unspoken agenda of Greens really is to not simply de-industrialize the globe, but to purposefully push humanity back, in a technological and lifestyle sense, several centuries.

Try putting that on a ballot and getting it passed!

You Wonder Why We Have Deficits? Federal Train Subsidies

Amidst Harry Reid's $1.1T omnibus spending bill and the wrangling in Congress over retaining current tax rates, here's a disturbing bit of news from the editorial pages of the Wall Street Journal, entitled Subsidy Trains to Nowhere.

The article noted that, even as newly-elected governors in Ohio and Wisconsin plan to cancel ill-advised rail projects in their states, thanks to federal subsidies, their voters will continue to pay for bad rail projects elsewhere in the US.

California's questionable Los Angeles-San Francisco rail line comes under scrutiny. Here's the detail from the editorial on that project,

"Consider the case of California, which is one of the states getting cash for trains that the Midwesterners didn't want. Earlier this month its high-speed rail authority approved construction on the first 65-mile segment of a 500-mile bullet train. The first miles will connect the small towns of Borden and Corcoran in the Central Valley for a mere $4.15 billion. Yes, that's billion.

One other detail: The segment won't even begin operating until more of the line is completed, which on present trend could be never. Read on and weep.
In the mid-1990s, California created a high-speed rail authority to prepare a plan for an economically viable rail system. It took a decade for the authority to get legislative approval to ask voters to approve a $9.95 billion bond ballot measure to partly fund the $40 billion project. The authority said that, for a one-way $55 ticket, the system would serve 94 million passengers between Los Angeles and San Francisco and create hundreds of thousands of "sustainable" jobs. It assured taxpayers the railway would operate at a surplus and without subsidies.
The authority has presented plenty of forecasts, one shakier than the next. It now projects that ridership will reach 39 million passengers a year by its 10th year, down from that projection two years ago of 94 million. The experience of other high-speed rail systems suggests they'll be lucky if they get a quarter of that, and five million riders is more likely.

The authority estimates a project cost of $42.6 billion, but a more realistic price tag would put the cost between $62 billion and $213 billion. It also predicts that one-way tickets for the two and a half hour ride from L.A. to San Francisco would cost $105 (up from $55), but the cost-per-mile in Europe and Japan suggests a ticket price closer to $190. Many would choose to fly.
The authority also predicted 450,000 permanent jobs; that's twice the size of the state government's active work force. Did they hire Joe Biden as their stimulus consultant?
Stanford economist Alain Enthoven, former World Bank analyst William Grindley and financial consultant William Warren document all of this in a study that's been reviewed and endorsed by more than 70 business leaders. Their conclusion: Unless the federal government provides $19 billion in seed money, the railway will never achieve a positive cash flow. State taxpayers will end up subsidizing a fantastic boondoggle, even though the authorizing legislation prohibits subsidies."


It's hard to believe anyone with common sense would even bother with such a project, isn't it? Moreover, if it were financially viable, why wouldn't private money be bidding to buy the rights to this project, while the state of California provided required rights of way, permits, etc.? Why would the federal government even need to be involved?

Certainly this sort of Dirksenian "a billion here, a billion there, and pretty soon you're talking about real money" attitude adds hundreds of billions of unnecessary dollars to the federal budget and, now, deficit.

It's one thing for government to assist genuinely productive and profitable enterprises. It's another for it to shovel money into projects of questionable value just to claim they employ workers. It's never valuable to have people dig holes, then fill them in, when the money you pay them for this valueless activity is borrowed from a potential enemy.

My 7th grade civics teacher, now Secretary of Transportation, Ray LaHood, should know better than to be frittering away taxpayer money and, worse, a future generation's wealth servicing the debt to pay for these boondoggles.

Will They Ever Learn?

The sorry spectacle of the pork-laden bill containing extensions of the Bush-era tax rates demonstrates how little members of Congress have learned from the November election results.

You have liberals complaining about taxpayers making over $200K being given an undeserved break. They never seem to be able to grasp that fact that many independent businesspeople do business through LLC's or other entities that roll up into 1040 returns. Thus, what appears to be a very wealthy person is, in reality, a business' tax return.

These same liberals then castigate businesspeople for not hiring and expanding their businesses. With rates in limbo or set to rise, what's the incentive for the independent capitalist?

Meanwhile, middle-of-the-road Democrats larded on the pork to what should have been a simple tax bill. Ethanol subsidies were protected, unemployment benefit extensions were included without any countervailing budget cuts elsewhere, and even $1B for implementing Obamacare was stuffed into the bill.

I don't now know the exact tab for all of the extra spending, but Mitch McConnell, among others, reminded voters that this looked a lot like last year's Christmas Eve rush into voting of a health care bill so fresh that nobody could read its thousands of pages prior to the vote. This bill now runs to at least hundreds of pages, as well.

You'd think merely extending tax rates and maybe unemployment benefits, in the bargain, could be done in about two pages.

These people simply don't understand why voters are so outraged. Even a simple tax policy extension attracts earmarks and pork, with neither current House or Senate leaders, nor Wonderboy gutting all the extra padding and simply passing  the tax rate extensions.

Perhaps this is a sign that taxpayer and voter ire will remain raw and fresh well into the 2012 campaigns. They should.

A Scary Deja-Vu At The White House On Friday

The press conference at the White House on Friday afternoon nearly gave me a heart attack. Which would have been fitting, since Bubba, a/k/a Ol' Pumphead, a/k/a Slick Willie was on the podium.

That's right. Bill Clinton was hauled out, invited down to Washington by Wonderboy and propped up at the West Wing podium to stump for the grand tax rate compromise which the First Rookie can't seem to stuff down the throats of his own party's House members.

If you saw White House press secretary Robert Gibbs choke on the word "triangulate" last week, then you were probably as shocked as I was that the term's notorious author was given the podium with no supervising adult in sight.

Ever since Bubba's heart surgery, he's been accused of having the oft-cited, but denied by cardiac surgeons, condition known as 'pump head.' Here's the initial description from that webpage,

"A study from Duke University, published in the New England Journal of Medicine in February, 2001, confirms what many doctors have suspected, but have been reluctant to discuss with their patients: A substantial proportion of patients after coronary artery bypass surgery experience measurable impairment in their mental capabilities. In the surgeons’ locker room, this phenomenon (not publicized for obvious reasons) has been referred to as "pump head." "

Some of Bubba's more egregious statements during his wife's campaign for the Democratic presidential nomination in 2007-08 were occasionally attributed to this phenomena. He certainly engaged in some pretty spectacular public antics, including leveling charges of reverse racism at various other political notables.

My point is, who would believe this damaged former president? Of what value is the guy's backing when he's already shown serious mental disconnects in public?

Even on Friday, he began to wander off point, babbling about how great the new nuclear arms treaty currently under consideration in the Senate will be, and using the word "stimulus" to describe the pending tax rate deal.

But there's no getting around how desperate Wonderboy looked, recruiting Slick Willie to back his own unwanted compromise, then fleeing the briefing room. Clinton seized the podium, literally, with both hands and would not let go until he had personally decided to end the press conference.

Would the major networks and other media outlets be as silent were George H. Bush recalled to the White House to help sell some policy?

Doubtful.

Congressional Democrats' & Wonderboy's Self-Inflicted Wounds On The Tax Deal

It's truly stunning to watch Congressional Democrats and Wonderboy implode in such a public manner over the tax cut negotiations currently stalled in Washington.

Karl Rove wrote a very good piece in his Wall Street Journal column this week, reinforced by several appearances on various Fox News programs. He points out how inept Wonderboy appears by not being able to control his own party's Congressional majorities, while publicly castigating the GOP as "hostage takers," and lambasting members of his own party, as well.

Rove notes how foolish and powerless the First Rookie thus becomes in the eyes of voters.

Meanwhile, various ultra-liberal House Democrats are making sure that voters remember why they handed the party it's stunning losses in the people's chamber last month.

You truly cannot make this up. Apparently the only Congressional Democrats capable of behaving like adults are those eyeing re-election bids in 2012. Otherwise, the party's members and Wonderboy are throwing caution to the wind, forgetting the voters' rebuke of their tax-and-spend policies, and doubling down.

How else to explain Wonderboy's own 'hostage taking' by tying 13 more months of unemployment benefits to the extension of the 2001 tax rates to all American taxpayers?

If you haven't viewed nor heard the president's address last week in which he bitterly announced the nearly-completed bi-partisan tax deal, it's something to see. His distaste at having to genuinely compromise is undisguised. This guy is no ordinary politician- he's an egomaniacal, spoiled brat.

The spectacle of him, and, in a video, his economic adviser, attempting to paint Republicans as evil for wanting job-creating wealthy taxpayers to share in avoiding a tax rate hike, merely reminds voters how insensitive and clueless Democrats are to how our economy actually works.

I suspect voters are going to remember this entertaining show for many, many months to come. House Democrats behaving petulantly, with Frisco Nan declaring that her minions will reject the tax deal. Wonderboy, as usual, painting anyone who disagrees with him as evil.

Rather than rescue his own re-election bid by being gracious and statesmanlike, the president publicly threw a tantrum and displayed his own impotence.

Conservatives should be rejoicing over this political theatre. The only thing missing is a reasonable requirement by GOP Congressional members that the unemployment benefits extensions be paid for, according to Democratic party promises, with budget cuts elsewhere.

What's Going On With Tom Coburn?

I happened to see Dick Morris' appearance on Sean Hannity's Fox News Channel program Monday night. Morris noted that Tom Coburn, the previously-staunch conservative Republican Senator from Oklahoma, has suddenly changed his stripes.

Morris was referring to Coburn's vote for the Bowles-Simpson's Commissions recommendations, including $1T of new taxes.

What has gotten into Coburn? Morris went on a rant, urging voters to call Coburn and a fellow formerly-conservative Senator whose name I can't recall. All week. Then Morris lamented that both had just been re-elected, meaning they have six years of insularity in which to potentially drift leftward.

Let's hope Coburn just had a brief lapse of sense. I understand that he thinks the whole package offered by the Commission opens spending cut doors on entitlements which were previously locked shut. But I don't think his voting for such enormous tax hikes is justified to get the entitlement changes.

He could have voted against the plan as a bad package, but supported the spending cuts as worthy of inclusion in future legislation.

The Tax Rate & Unemployment Insurance Deal

The recent Congressional-White House deal to retain tax rates for two more years on all incomes, in exchange for 13 more months of unemployment insurance, strikes me as just more business as usual in Washington.

I know many will credit the Republicans with forcing the tax rate hikes, due to lapsing cuts from 2001, two years into the future.

But only temporarily delaying their expiration- again- and allowing yet another unprecedented extension of unemployment insurance benefits, doesn't fix anything. It simply expands the deficit from the latter spending.

Couldn't the GOP members of Congress have at least insisted on offsetting spending cuts for the unemployment benefits? I'm all for helping the needy, but the US taxpayer and government budget is not a bottomless pit. We're so clearly at a point of requiring spending ceilings and tradeoffs that this would have been an ideal time for the GOP to stick to that point.

Instead, voters see more of the same old games. Dangling temporary tax cuts while borrowing or taxing them to transfer their wealth to those who aren't creating value.

Hardly the dynamic US economy that so enriched our nation for generations.

Joe Crowley's Nonsensical Rant On CNBC

Yesterday morning, I witnessed an interesting exchange between Steve Forbes and NY Democratic Congressman Joe Crowley.

Forbes was a guest host for an hour, mostly to discuss the current support building in Congress for a sweeping tax code overhaul. If you recall, Forbes ran for president some years ago on the flat tax issue. Or perhaps just simplified- I don't recall the details anymore. But I do recall tax comprehensive tax reform as his salient issue.

Crowley, however, exhibited the type of behavior which makes you realize why you want small government. He ranted a now-familiar line about how Bill Clinton was a god-like president leaving a budget surplus. George Bush, of course, spent it all, and then some, leaving Wonderboy with a sorry mess.

Taxes, of course, must rise, as must spending.

Crowley must be an idiot. His refusal to listen to Forbes' reminders of the context of the various points that Crowley made showed him to be a mindless demagogue. No acknowledgement of the booming, post-Reagan economy Clinton inherited. Nor the famed 'peace dividend' from the Soviet Union's collapse.

Nor Bush' inheriting a war on terror, thanks to Clinton's turning a blind eye to the building pressures and events.

When you hear guys like Crowley spout such ill-informed, small-minded nonsense, you realize why you want Congress doing as little as possible, influencing as little of American life as possible, and generally keeping focused on spending, taxes and foreign affairs. Not business, wealth transfers, nor other important social issues.

Crowley exemplifies the type of mediocre people who populate Congress, because the smarter, more motivated among us are busy making money and pursuing our American Dreams. Leaving morons like Crowley minding the government, and making mischief by increasing their power over the lives of the rest of us.

Wonderboy's First Term Millstones

William McGurn wrote a thought-provoking piece in his weekly Wall Street Journal column on Tuesday of last week. In it, he drew a sharp contrast to Wonderboy's potential for a second term, and that of Slick Willie's.

A key passage early in his editorial was,

"That story is this: Democrats remain in charge for the next few weeks, they have some big decisions to make and, at least for now, Mr. Boehner's relations with Mr. Obama are of far less moment than the president's relations with his own party."

The remaining Democratic liberals in Congress, McGurn points out, are about to make Wonderboy's situation worse,

"To try to get these through in a lame-duck session risks solidifying one of the chief indictments against Mr. Obama and his allies in Congress. That is their arrogance in riding roughshod over public opinion and standard legislative procedure in Congress to get what they wanted."

Amazingly, as McGurn opines, the remaining Congressional liberals, and their allies, worry that Wonderboy will ape Slick Willie, run to the center, and moderate their desired agenda in order to gain re-election.

However, he notes,

"They may not have to worry. Because Mr. Clinton's health-care plan was defeated, he could walk away from it in 1994 and start afresh. In theory, Mr. Obama might likewise move to the right and use Democratic liberals as a foil to his pragmatism. In practice, it would be hard to do while defending his health-care initiative.

In other words, there is a story well worth covering: an intramural Democratic fight about the way forward. In this fight, Mr. Boehner is a side story."

McGurn makes a very cogent point. Wonderboy can't escape the voter outrage at the health care law. So triangulation is impossible for him, without essentially repudiating his own self-proclaimed greatest legislative achievement.

Perhaps conservatives have reason already to rejoice over the 2012 presidential election.

The Grey Lady's Double Standard

The Wall Street Journal's James Taranto provided this undeniable example of the New York Times' indefensible double standard regarding leaks.

"The documents appear to have been acquired illegally and contain all manner of private information and statements that were never intended for the public eye, so they won't be posted here."—New York Times, on the Climategate emails, Nov. 20, 2009.


"The articles published today and in coming days are based on thousands of United States embassy cables, the daily reports from the field intended for the eyes of senior policy makers in Washington. . . . The Times believes that the documents serve an important public interest, illuminating the goals, successes, compromises and frustrations of American diplomacy in a way that other accounts cannot match."—New York Times, on the WikiLeaks documents, Nov. 29, 2010. "


Some it likes, others it does not. No surprise which is which, is there? Just that there would appear to be no difference, apart from the political perspective so obvious in the Times' positions.

More Unemployment Benefit Extensions?

Despite Wonderboy's public show of spending restraint, which was the subject of yesterday's post, he came out for more spending right after that stunt.

The topic, of course, is extension, for the zillionth time, of unemployment benefits. Somehow, this guy seems to think dollars spent for different purposes have different values.

Spending money on unemployment benefits lasting over two years is, to him, qualitatively different than spending the same amount of dollars on raising federal salaries.

What he fails to see is that, from a global perspective, it's all spending for which the US must borrow. And, thus, all suspect to our creditors.

How can we ask taxpayers to either pay more taxes now, or pay even more taxes in the future for current borrowings, just to extend unemployment benefits to unheard of terms?

If Congress had a more disciplined, reasoned framework for appropriations and spending, then we wouldn't be reading about such one-off spending requests so frequently. Instead, federal spending would truly be done by trading off priorities against each other- not simply spending to satisfy them all, then borrowing the money overseas.

Wonderboy's About Face On Spending

This week Wonderboy did an abrupt about face on federal spending, calling for a 2-year freeze on federal salaries.

Not wanting to be ouflanked by GOP House members in January with their comprehensive plan to cut spending, the First Rookie offered his token cuts as if they will really solve the deficit problem.

A Wall Street Journal staff editorial pointed out the rapid growth in the number of federal jobs during the past decade and few years. Compensation levels, while excessive, aren't the the only, nor really the major problem. It seems to be the raw growth rate and numbers of federal workers.

The few billion promised as savings from the wage freeze is small beer after Wonderboy ran up a trillion dollars in so-called stimulus spending, most of which was wasted. And there's still the bills for the expensive health care law to come.

Capping federal worker compensation after the past few years' excesses is just too little too late.

More Tax Cut Drivel On CNBC

The other morning on CNBC's SquawkBox program, Carlos Whatshisname was debating the now-constantly newsworthy topic of of extending the Bush-era tax cuts.

As the guest pundit described the economic stimulus to be experienced by such extension, Carlos, ever the dyed-in-the-wool, mindless liberal, solemnly intoned,

"But they'll have to be paid for sometime down the road."

What is it about liberals and ignorance of so-called dynamic scoring? Do they really still believe that cutting tax rates loses revenue, because nobody invests more or works harder when they get to keep more of what they earn?

You'd think CNBC would be less backward than that. But they're not. Instead, they continue to spread misleading propaganda that all tax cuts must be 'paid for,' because the problem is never government spending, it's the wealthy not paying their 'fair share,' however that is determined.

Al Gore Comes Clean On Ethanol- At Last!

According to a recent Wall Street Journal staff editorial, Al Gore has finally come clean about his politically-motivated past support of corn ethanol.

Gore has admitted that he backed subsidies for the alternative energy because he needed the support of corn-growing Iowans to win a Democratic presidential nomination, as well as the continued votes of his home-state farmers, in order to maintain his House and Senate seats prior to being Vice President.

"Warm Boy" Al told a group of "clean energy financiers in Greece this week,"

"It's hard once such a program is put in place to deal with the lobbies that keep it going."

The editorial notes Al's opposition to "first generation" ethanol, leaving open subsidies for so-called advanced ethanol that the piece contends "is just a year or two away from viability for two decades."

Republican Senators DeMint and Coburn are pushing the new Congress to let current ethanol subsidies expire next month. When challenged by Iowa's Chuck Grassley, a GOP colleague, to treat oil and gas subsidies similarly, the first two Senators rose to the offer.

In effect, DeMint and Coburn know that oil and gas are economically viable and in demand without subsidies or tax preferences, while ethanol has no chance without them.

More Municipal Bankruptcies Coming

Last Friday's Wall Street Journal featured a staff editorial describing the financial woes of Hamtramck, Michigan.

Towns in Michigan apparently require the state's permission to file for bankruptcy, and Hamtramck is so seeking. The editorial cites the town's $3MM deficit on its $18MM budget. According to the article, million-dollar deficits have been recurring for the past 10 years to fund lavish union compensation and benefits.

But the latter paragraphs of the editorial contain stunning figures.

"Municipalities nationwide are running a $574 billion unfunded pension liability, on top of $3 trillion in state unfunded liability. Philadelphia's pension fund is set to run dry in 2015 and Boston's in 2019, when over half of the city's revenue will be dedicated to pensions."

These are staggering sums, and, when added to federal deficits, produce astounding levels of per capita indebtedness for US citizens. Moreover, knowing that large US cities are facing totally-exhausted pension funds before the end of the decade is sobering.

You can't avoid realizing that there will have to be a general reduction of expectations by US citizens regarding government-provided pensions and pensions to state and municipal employees. Unaffordable promises were struck in the past which simply won't be met by the working public's taxes. Either pensions get trimmed, and/or converted to defined-contribution plans, like the private sector, or cities and states are going to file for bankruptcy protection, in order to forcibly alter those pension plan terms.

Ending Lame Duck Congressional Sessions

Betsy McCaughey, former New York lieutenant governor and health care legislative pundit, wrote an insightful editorial in the Wall Street Journal recently entitled This Lame Duck Session Should Be the Last.

McCaughey reminds us that, prior to 1933, Congress didn't reconvene until March 3rd. The 20th Amendment cut the lame duck period by three months, leaving just a two-month stub of a session. But, as McCaughey emphasizes, back then, "no one imagined that the old Congress would return to the capital during that time."

She helpfully explains that only in extreme circumstances, such as the Korean War and WWII, did Congress ever reconvene after November elections, until two decades ago. Now, the lame duck session has become one of vindictive legislation jammed through by a party which lost on the first Tuesday of that November.

She recommends that,

"When John Boehner, the presumptive House Speaker, takes charge in January, he should introduce a bill providing that Congress will not meet between the November 2012 election and Jan. 3 2013. That simple change in the law will put the voters back where they always belong: in charge."

Fine for now. Is it each Congress' inability to bind future Congress' that prevents legislation, rather than Constitutional Amendments, from solving this problem permanently?

If so, it should be done. Along with, while they're at it, term limits on Congress and all Federal judges.

Glenn Beck's Faulty- Or Misleading- Reporting On Chocolate Inflation

I love chocolate. I take it sort of seriously.

So a few weeks ago, amidst his earlier programs about George Soros, Glenn Beck addressed the Fed's QE2 and its inflationary consequences.

Among the various commodities he spotlighted for price rises, Beck included chocolate. He reported that pundits with whom he or his staff had consulted forecast a $1.25 (or thereabouts) Hershey chocolate bar would soar to $7.

From the context and arrangement of the program's reporting, it was hard to miss the implication that chocolate prices are going to rise due to a weakened dollar. And maybe....maybe....global demand among newly-enriched nations.

Then, this morning, on CNBC, I happened to catch a much more deeply-reported version of the $7 chocolate bar story.

It seems that some foreign countries which are currently sources of cocoa beans are beginning to take acreage out of cocoa and plant more profitable crops. Meanwhile, global demand for chocolate is rising.

So, in the short term, there might be some upward pressure on chocolate prices, due to upward pressure on cocoa prices. In the very short term, the reported contended, there may even be some shortages.

But, happily, this is a normal economic supply-demand thing. Vietnam is reportedly planting cocoa. Other countries may, too, to replace the lost acreage and reap the higher cocoa prices currently being experienced. Then there are research efforts by trade groups to develop a cocoa bean that can survive in less forgiving environments, i.e., more temperate, less tropical ones.

So any near-term chocolate and cocoa price rises will probably be short-lived. And the source of the price rises have little to do with a weak dollar, although they are partially a function of rising global appetites for the sweet stuff.

I like Glenn Beck, and consider him to often do public service by providing useful information on various political topics. Especially semi- or totally-hidden, Progressive movement antics.

But in this case, on this story, Beck and his staff appear to have gotten it mostly wrong.

All The GOP Contenders

Last week, on one of the Fox News programs, probably Bill O'Reilly's Factor, there was a partial handicapping of GOP presidential contenders. In this weekend's Wall Street Journal, Peggy Noonan wrote her own ode to GOP presidential wannabes, citing this holiday weekend as decision time for many of them.

Both feted Mitt Romney as the one Republican who is clearly running- again.

God save us!

Romney is responsible for one of the worst state-run health care schemes in America. He had an outrageously high dollar/vote ratio in the last GOP presidential primary season.

Though visually impressive, Romney comes across as too glib, postured and wonkish when mixing it up with other candidates. I still recall someone asking him about some international incident. His response was that he'd first turn to his counsel for legal clarifications. It was a very safe, consulting-style reaction. And not at all comforting.

Then there's the worrying example earlier this month of ex-eBay CEO Meg Whitman going down in very expensive flames out in the California gubernatorial race. This should remind us all, and Romney, again, that vast fortunes and CEO experience doesn't guarantee electoral success. Yes, I know Romney was governor in Massachusetts, but his healthcare mistake, at least for me, overshadows the rest of his tenure there.

In fact, in the same vein that I always found McCain's foolish co-sponsorship of McCain-Feingold to mark him as dangerously Progressive and stupid, I find Romney's backing of RomneyCare to be a similarly important marker for being untrustworthy and lacking in truly conservative principles.

If you want to unseat Wonderboy, I'd put my money on Giuliani, Gingrich, Tim Pawlenty or Mitch Daniels way before I'd ever consider Romney.

The Deficit Commission's Recommendations

The Bowles-Simpson Deficit Commission's report last week contained something to upset voters of all political persuasions.

Despite the 'everything is on the table' verbiage, they didn't touch the disastrous new healthcare law, recommended some tax increases, but also a tax code overhaul, some small changes to Social Security eligibility, and a lower corporate tax rate.

However, between the Wall Street Journal staff editorial on the subject last Friday, and a more recent editorial citing the overall, unexepectedly strong, bi-partisan shift towards tax reform, it would seem a few important taboos have been broken by the commission.

While the near term arguments continue over extending the Bush tax cuts, that debate has quietly been overtaken by a sudden, widespread confirmation by many parties that the tax code really, no, really this time, has to be simplified. The decades-old pipe dreams of lower rates with fewer deductions and preference items actually seems to have gained a large, potentially legislatable following.

Is it the new, multi-lateral global economy featuring several other vibrant nations on the road to self-enrichment, sporting lower tax rates than America's?

The other major breach in the wall of denial is the commission's admission that federal legislators will have to swallow hard and grab the third rail of entitlement spending. Maybe it's Social Security, or Medicaid, or Medicare. Or all of them. But the commission's tiptoe into another Social Security 'fix' involving still-trivial, but at least identifiable admissions of the reality of a longer-lived population and fewer resources to fund them is heartening.

Look to Europe for reinforcement of this new political sanity. Who'd have believed that France, Greece and the UK would actually behave more boldly on social spending legislation to curb excessive deficits in the coming decades.

The larger perspective, of course, is inter-generational transfers. How can this currently-older generation, and its middle-aged brethren, be allowed to borrow, literally, for and from future generations, to fund retirements and benefits they cannot earn and fund themselves?

They can't. It worked for a couple of decades, but it seems to have finally run its course. There's just a lack of willingness on the part of global investors to fund this insanity anymore. And that's a good thing!

The Skeleton In Spencer Bachus' Closet

As the GOP begins to name its House committee chairmen, the Wall Street Journal peeked into the closets of a few Republicans. What it reported in last Wednesday's edition, in its lead staff editorial, was troubling.

It turns out that Alabam's Spencer Bachus, a frequent guest on CNBC, was far less conservative and responsible regarding Fannie Mae than he has been talking recently. Specifically, the Journal cited Bachus' efforts in 2005 and 2007 to fend off tighter regulation and stiffer capital requirements for the GSE.

Not coincidentally, Bachus "was the single largest House recipient of campaign cash from Fannie and Freddie from 1989-2008."

The editorial argued for Californian GOP Representative Ed Royce to take over the Financial Services committee.

From what I read, though, it's clear that Bachus' recent charade is just that. And that he should be denied control of this important House committee.

Much Ado About Earmarks

Thank God Mitch McConnell finally got some sense slapped into him by more conservative, sensitive GOP Senators like Tom Coburn and Jim DeMint. Senators who actually bothered to notice the Tea Party activists and their fury over federal spending.

Leave to old mossbacks like McConnell to turn a deaf ear to the very movement that gave him 6 additional Senators to work with.

Sure, now he's repenting and beating his breast in support of a Republican Senate ban on earmarks. But what about his obstinacy to the idea for the past few weeks? Even John Boehner managed to man up and bow to his younger, more in-tune colleagues, like Eric Cantor.

Frankly, I just don't trust McConnell. I'd much rather see Coburn, Corker or DeMint heading up the GOP Senate caucus.

What the Congressional House and Senate leadership seem to miss is that it's not the party loyalists, but the independents whom they have to convince, for the next two years, that they have really, finally gotten it.

Because a failure to do so could swing control in Congress right back the other way again. And with Wonderboy at the top of the ticket next time, and maybe a better economic scenario, don't think it can't happen.

Glenn Beck's Investigation of Spooky Dude George Soros

Last week  saw Glenn Beck devote several evenings of his Fox News program to putting ultra-liberal, Progressive and government- and society-manipulating billionaire George Soros under a microscope.

I can't recall all of the things Beck said about Soros. Given the former's tendency to overstate certain economic and financial phenomena, I think he probably accused Soros of some financial chicanery that may not have been proven. But he did manage to include the infamous case in which Soros, generally believed to have had inside information, bet correctly against the British pound and made billions on the trade.

More recently, Soros' lavish funding of Progressive groups in American politics have made it easy to track his activities.

But what is so amazing is how much good video footage Beck aired of Soros bluntly arguing for global governance and the need to make the US Congress more accountable to other nations via various extra-political efforts. Soros is seen, and heard, saying that non-Americans deserve a vote for the US Congress, because America is the lone global superpower. Apparently much of those videos were publicly available from some sort of Soros-backed quasi-global government 'convention' he holds on a recurring basis.

It's stuns me to think Soros is either so arrogant, or foolish, or both, as to not believe any of that footage would eventually come back to haunt him. Not to mention his ham-handed attempts to intimidate Beck, complete with giving the latter's emissary a copy of the movie A Face In The Crowd. This post contains two YouTube videos from the movie.

Ironically, Soros doesn't see himself in the role of Lonesome Rhodes- only Beck.

Priceless.

But I think Beck did a great service to Americans by shining a very bright spotlight on Soros' malevolent attempts to undermine our Republic with his billions and his personal political agenda of world government and the collapse of the value of the US dollar and our nation's standard of living.

Charlie Rangel's Day of Reckoning

It looks like alleged income tax evader Charlie Rangel has finally run out of time. The Wall Street Journal noted, in an article in today's online edition,
"Mr. Rangel faces a congressional ethics proceeding on 13 separate counts, including failing to report assets, failing to pay taxes on rental income from a vacation property and misusing congressional stationery to try to raise money for a college center named in his honor. The 80-year-old lawmaker has represented New York City's Harlem neighborhood in the House since 1971 and had been the chairman of the powerful Ways and Means Committee until he was forced to step down in March."



Rangel has been, well, wrangling over these charges for several years. As the Journal article notes,

"He has spent two years and more than $2 million in legal fees dealing with the investigation of his finances. His legal team left the case last month when his campaign fund ran out of money to pay them. Mr. Rangel could, if he wanted, pay for a lawyer out of his own funds, but as a member of Congress, he can't accept pro bono work from an attorney.



Mr. Rangel said he needed more time to do so.


"You tell me all of the things I could do, but you won't give me the time to do it,'' he said. "I truly believe I am not being treated fairly.'' "


So it would seem that Rangel made a choice two years ago to try to run out a clock on the House Ethics committee. But this month's elections made that a losing strategy, with Republicans set to take control of the House come January.

Thus, the Journal piece reported,

"Rep. Charles Rangel walked out on his trial before the House ethics committee as it began Monday, saying it was unfair to ask him to continue without a lawyer that he couldn't afford.



"I am being denied the right to have a lawyer right now because I don't have the opportunity to have a legal-defense fund set up,'' the New York Democrat said. "I truly believe I am not being treated fairly.''


Mr. Rangel left the hearing room less than a half-hour after the proceedings began and didn't return. The case has been an embarrassment for Democrats who took control of the House in 2007 pledging to run the most ethical Congress in history.



The panel's eight lawmakers appeared to be taken aback by Mr. Rangel's abrupt departure, huddling privately to consider his request for a delay in the trial while he continues to seek a lawyer. They soon decided they would continue without him. "He has indicated that he does not intend to participate, and it is his right not to participate,'' said committee Chairwoman Zoe Lofgren, (D., Calif.)."



That's rich, isn't it? Rangel got to use $2MM of campaign funds to pay for his defense. He chose to take two years to delay his trial. Now he claims to be ill-treated for being forced to continue with the case.
I hope he is treated justly in absentia. By that, I mean the same as any other private citizen would be treated in similar circumstances, for similar tax-related behavior.

Wonderboy Abroad

Much was made by conservatives over Wonderboy's nearly-immediate post-election trip to India, Indonesia, et. al. Rather like running away from the distasteful, though misunderstood results of last Tuesday's Democrat drubbing.

Unfortunately, Fox News' Glenn Beck reported an outlandish figure of $2B for the trip, citing stories that 34 US naval vessels would be standing by off India.

Many aspects of Beck's contended trip details were debunked by others in the media. I'm a little surprised, but more disappointed, that he didn't take more time to check some of the more obvious factual errors. The US Navy spokesperson sounded like he nearly doubled over with laughter at the idea that more than 10% of available fleet vessels would be detailed to a diplomatic visit.

But Beck did point up something notable and troubling. He reported that the First Rookie was meeting with an Indian Chamber of Commerce group. Which is odd, as Beck noted that Wonderboy won't meet with any American Chamber people and, instead, accused them, without proof, of accepting and using foreign donations in the recent Congressional election campaigns.

Watching some of the footage from the Anointed One's risky town hall formatted meetings with apparently-ordinary Indians, you couldn't help but notice his inability to answer tough questions directly there, either. One young woman asked him about Jihads, and he rambled off into an incomprehensible muck of a reply. The poor girl must have been quite disappointed. There was a similar incident a few days later regarding some other social policy issue.

Meanwhile, global leaders are heaping opprobrium on Wonderboy for the US' fiscal policies of huge deficits and excessive spending, coupled with the Fed's currency devaluations via QE2. It seems most of the rest of the world, including Southeast Asia, holds stronger beliefs in free market capitalism than the sitting president of the US.

Truly a sad state of affairs.

Senate Control Through 2012

Several conservative pundits, most notably Fred Barnes, in a recent Wall Street Journal, post-election editorial, have opined that control of the Senate won't necessarily be in Harry Reid's hands for the next two years.

With this month's election already in the rear view mirror, these pundits are already looking forward to November, 2012, when something like twice as many Democratic Senators are up for election, relative to only about 12 Republicans.

With so many Democrats at risk, and the potential for the Tea Party-inspired conservative pressure on spending and reversing liberal social legislation and regulation, these observers contend that perhaps as many as half of these Democrats in the Senate will want to appear more moderate, if not conservative. This could mean surprising majorities for Republican Senate Minority Leader Mitch McConnell.

Even if a few Northeast liberal Republicans (Snowe, Collins) defect, they could be more than replaced by ten Democratic Senators suddenly allying themselves with McConnell's agenda, at least in some cases.

Should make for an interesting next two years, as House GOP control could occasionally be joined by occasional Senate GOP control, as well.

A Detailed View of Medicare's Destruction of US Medical Care

Yesterday's Wall Street Journal included an eye-opening editorial by Richard Hannon, a Blue Cross Blue Shield (of Arizona) SVP, concerning how Medicare contributed to the destruction of US medical care.

Hannon's father-in-law was a doctor. The type of doctor whom Hannon describes as 'a Marcus Welby, M.D.' type who made house calls and treated the poor sick either for free, or for payment in kind. He writes,

"I remember my father-in-law, a real-life Dr. Welby, telling me the exciting news that the federal government was going to start paying him to see seniors- patients who before he had seen for the proverbial chicken (or nothing at all). That fabulous deal was Medicare."

Right at this point, I thought about prior posts I've written on this or my other blog concerning how Medicare was a rather stupidly-designed knock-off, for medicine, of the 1930s Social Security program. They both share direct federal government intrusion into otherwise-private behaviors, and a 'common pot' approach to social services provision. That is, social security has a single general fund out of which payments are made, without any limits on individual payments or an ability to assign individual ownership of assets.

In the case of Medicare, just from Hannon's example, it's easy to see how wrong things went from the very start. Rather than have government, as a third party, pay the doctor, why didn't Washington's political hacks simply means-test Americans for vouchers to be used either to buy health insurance or to fund a health savings account, out of which to pay for medical care?

Hannon continues by describing how Medicare's costs ballooned so exorbitantly that, in 1966, Congress estimated the program's 1990 cost would be $12B, which was laughably under the actual 1990 cost of $107B!

Then came cost controls. But Hannon provides details that simply defy reason and logic,

"To fix the cost problem, Medicare in 1992 began using the "resource based relative value system" (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training. But the system didn't consider factors such as outcomes, quality of service, severity or demand.

Today most insurance companies use the Medicare RBRVS because it is perceived as objective. As a result of RBRVS, specialists- especially those who perform a lot of procedures- do extremely well. Primary-care doctors do not."

It makes you want to cry, doesn't it? Most sensible people wouldn't design such a stupid system. And they'd certainly include outcomes and relative demand or incidence of condition and disease when creating algorithms to price medical care.

Hannon goes on to trace the decline of the GP, or, as they are now called, primary-care doctor, under this pricing system. And to lay the demise of good, preventative primary care at the feet of Medicare's centrally planned system, replete with formulas, data, and abstracted views of medicine.

His editorial is engaging for its combination of a personal anecdote which captures so well the innocent hopes even doctors initially held for the centrally-operated federal government medical juggernaut which would ultimately warp, then destroy the simpler, less-expensive world of medical care that I knew in my youth.

Frisco Nan Aims To Be Next House Minority Leader

You cannot make this story up. After having led House Democrats to a 60+ seat loss last Tuesday, California's Nancy Pelosi is demanding to be returned to the leadership of her party's House members.

Of course, most sensible people would have exited the scene, the better to facilitate independent voters forgetting why they swept so many Democrats out of the House last week.

It must be near the height of arrogance for Frisco Nan to insist on staying at the helm for House Democrats, albeit now in the minority. Not to mention stupidity on the part of the remaining Democratic House members who don't think it matters that Nan's antics led them to defeat. Can you get more clueless than that? I don't think so.

Given that the GOP is similarly mistaken in keeping Boehner in their leadership team, they are truly lucky that Nan is eager to remain in the public eye for the next two years. Otherwise, voters might forget why they chose to give control over to the Republicans for a couple of years.

John Boehner's Post-Election Interview with Fox News' Bret Baier

Last night, Fox News' Special Report aired this interview of prospective Republican House Speaker John Boehner with Bret Baier. This link may break over time, and the clip was not on YouTube, nor downloadable, so the Fox News link is the best I can do for now.

I haven't been one of Boehner's biggest fans, and in prior posts, have argued that he needs to renounce his intention to become Speaker next January. To me, Boehner's having been part of the GOP leadership that lost control of the House in 2006 is reason enough for him to step aside and let new blood lead the House, if for no other reason than to demonstrate to the independent voters who gave Republicans their new House majority in the next Congress' House, that he and the GOP 'get it.'

That said, this interview has substantially improved Boehner's standing in my view, although it still hasn't changed my opinion about his becoming Speaker.

I was heartened by Boehner renouncing earmarks and coolly, repeatedly saying that the Republicans 'will not raise taxes on the American people.'

Very clear, succinct and positive. I think it's no small thing that Boehner refused the bait of discussing 'extending the Bush tax cuts,' which makes it sound like that is change. Instead, he echoed Glenn Beck's view that we need to not raise taxes- period. That, of course, means making the nearly decade-old tax rates permanent.

Boehner signaled unwavering agreement with voters that Obamacare must be repealed, stopped or defunded. This is a clear signal to Wonderboy that the latter's attempt to characterize any effort to repeal the healthcare bill is going 'backwards' won't fly in the House.

Boehner also rather positively implied some type of explicit approach the GOP might employ to demonstrate it is listening to voters outside the Beltway.

You don't get such a sense of personality cult with the Ohio Representative as with Frisco Nan or Gingrich. Of course, the context is much different. How odd, that Boehner's GOP House majority won't be such an oasis after a long dry spell of control of the House, but, at the same time, is a larger wave of incoming GOP freshmen than in 1994.

Overall, I think Boehner gave a really terrific interview.

Wonderboy's Post-Election Excuses

I was working on some posts while listening yesterday afternoon to Wonderboy's post "thumping" 1PM address and press conference. Only I guess he called it a "shellacking." It's one of the very few times I could tolerate his voice for so long.


It was quite a treat, I must admit, to see and hear him devoid of his usual arrogance.


His opening remark was amazing. He first expressed regret that 'so many fine public servants' would be leaving Congress or other political jobs. He defended the defeated Democratic Congressional and Senatorial members as having made difficult, career-ending votes that had to be made.


I guess Wonderboy missed the part of the Tea Party movement which is incensed with career politicians spending us into oblivion.


After trying to put his usual 'miscommunication' spin on the House blowout, Wonderboy then inexplicably began to try to describe his economic plans by way of electric cars and green technology. Try as they might, reporters could not get the First Rookie to acknowledge that voters across the country had repudiated his program and so-called leadership.

In his remarks and responses to questions, he continued to show his tin ear, professing the now tired explanations that: a) nothing was his fault, he inherited the biggest mess in American history besides FDR; b) things were much better, but people don't realize it, and are ungrateful, and the fact that voters don't yet realize how well he's fixed things is his fault, and; c) there's no need to change direction, just communicate better.

Truly amazing how dense and arrogant this guy is, isn't it? His party suffers the worst loss of House seats in more than 50 years, loses at least 6 Senate seats, including his former one, as 2 races remain to be determined, plus a solid Democratic seat earlier this year (Scott Brown in Massachusetts), and he thinks it's all just a slight misunderstanding due to his miscommunication of how well life in America has become under his socialist regime.

The Election's Aftermath

By now, everyone knows that the Republicans, thanks to Tea Party activism and general voter outrage at the administration's and Congressional Democrats' socialist legislation and excessive spending of the past two years, retook control of the House with a net gain of some 66 seats. By Fox News' count, the largest change of seats in the House since 1946. The Senate saw GOP gains of 6 seats.

Not accidentally, several media pundits weighed in yesterday with advice on how Wonderboy can rebound from the anticipated, now real "thumping," to use George W. Bush's term, the president and his party took at all governmental levels.

The Wall Street Journal's Gerald Seib wrote extensively on how Reagan came back from the mid-term losses of 1982. CNBC held a panel in which they once again (over)used the analogy of Wonderboy as national CEO and Congress as his 'board of directors.' Various organizational behavior mavens, including Yale's Jeffrey Sonnenfeld, chimed in with their views. As you might expect, the two most frequently-mentioned 'solutions' for the current administration is to triangulate/compromise with the newly-empowered House Republicans, and to focus on economic and job growth.

Seib at least noted that Reagan's Republican's didn't lose the House, but merely seats in the House. And only about 25, at that.

There's a problem though. Whether you believe our First Rookie is capable of compromise- and it seems like he's not- his basic values run to socialism, not capitalism.

So if he can't compromise on economic issues, and his are, as we have seen, wrong-headed and prone to fail, he can't really do what the various observers recommend.

Everybody seems to have missed this point. Reagan's approach worked because, well, as Seib at least acknowledged, it led to economic and job growth unrivaled in decades. Now, we have the reverse, and no prospect in sight for anything remotely Reaganomic. Even the decade-old Bush tax cuts are to become Obama tax increases in two months.

My point is, I don't think this president can or will compromise his few, core, socialistic values to re-ignite robust US economic growth.

That said, all the pundits mouth the 'compromise' platitude. Even Frank Luntz' focus group on Fox News last night nearly universally called for Congress to simply 'get the job done,' and 'listen to us.'

How do you get compromise when one party has dumb, unworkable ideas, and the other wants to change that?

Boehner's speech last night at least noted one important fact come January. Something Gingrich found out the hard way as Speaker.

The president has to lead, because his veto of divided-chamber legislation makes the House unable to enforce its majority's will. It's true that the new GOP House majority can de-fund and selectively hamper various programs, perhaps even including Obamacare. But it can't lead the country.

Where this will all shake out is anybody's guess. But I suspect that even if Boehner isn't sufficiently astute to avoid Gingrich's mistakes, having Eric Cantor, Paul Ryan and other GOP House "young guns" on his team will go a long way to prevent a rerun of the 1990s government shutdown while Gingrich faced off against Clinton.

The new House GOP leadership is probably better positioned and informed to effectively deal with the split-power government which will sit in Washington come late January.