“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Saturday, April 30, 2011

Trump, The Birth Certificate, & Frank Luntz

Frank Luntz issued an open-ended challenge on a Fox News program this past week for a $10,000 bet that Donald Trump will not formally run for president.

He's the only source of objectively critical coverage of Trump, other than Bloomberg, and they both have echoed my own misgivings about Trump as a credible business person. I've written several posts on that topic, notably this one.

However, Luntz, by far, issued the most unqualified statement that he believes Trump is simply mining free publicity, but has no intention of seriously running.

None of his foreign policy ideas appeal to anyone who understands how markets and global political dynamics work. Yes, many like the blunt, tough-talking lines. But if you pay careful attention, you'll note that none of Trump's promises can actually be fulfilled by him as president.

As one pundit, I believe Charles Krauthammer, while Trump sounds a lot like Pat Buchanan, at least Buchanan actually had some experience in government.

Trump hasn't really succeeded in his own area of activity without several bankruptcies and a gilded start. So I think it's safe to dismiss his antics as so much grandstanding.

Friday, April 29, 2011

The White House Smirks At Easter

I saw the video clip of the White House press secretary smirk derisively in response to questions regarding the lack of any formal Easter statement this year.

Critics have noted that Wonderboy observes 'made up' holidays like Kwanza, but failed to have the White House issue any sort of formal observance of this very important Christian holiday.

Defenders of the First Rookie immediately categorize these criticisms as racism and more attempts to paint him as a Muslim.

To me, as one pundit also contended, the President of the US is both the Chief Executive and the chief ceremonial officer. Thus, for a largely Judeo-Christian nation, it's been customary for years that there have been observances of certain holidays important to the largest segments of the population.

I wouldn't have minded so much if the press secretary had simply said they felt Wonderboy's attendance at a (yet another problematic, but that's a story for another post) Christian church on Easter Sunday was sufficient.

But the smirking and derogatory attitude suggesting that the issue was inane and beneath concern belied a smug satisfaction that such a formal observance of this Christian holiday had been noticed.

Thursday, April 28, 2011

Voting & The Tipping Point: Transfer Payments Outstrip Wages

Back in November of 2008 I wrote this post concerning the notion of voter eligibility. It's actually one of my most popular ones, judging by Sitemeter's referral data. It's a topic that often raises images of Jim Crow laws, police with fire hoses, and unfair, overly-complicated literacy tests in the Deep South before 1970.

However, a report out this week that transfer payment income has now outstripped wage income in the US caused me to think that it's time to write another post on the topic of voter eligibility. Earlier, I suggested that if you don't pay taxes at local, state or federal level, you shouldn't be eligible to vote in those elections.

Perhaps it's simpler....if you make more from transfer payments than wages plus capital gains, you shouldn't be eligible to vote for anything.

Simply put, if you take more than you make, you don't deserve to vote. You can talk all you want, but since you are living off of others, you aren't allowed to tell them how to govern. And, most importantly, you aren't allowed to tip the scales further by voting for your own interest in living off of the kindness of your fellow citizens.

I honestly think it's time we consider such eligibility criteria. It's clearly not meant to subjectively infringe on any age, race or other particular group, except those who derive the bulk of their income from others, by way of transfer payments.

The nation's original voting criteria involved land ownership. At the time of the Revolution, landowners were seen as having identifiable "skin in the game," while merely working for a living wasn't seen as having a stake in a community. Land was immobile.

Now, it's not mobility that is the issue. It's living off of government largess. So an eligibility test that is more purely directed at earnings sources would make much more sense. Only those who produce more value than they receive from the government should be eligible to vote. Based on the prior year's tax returns, the federal government would be able to provide each state and local jurisdiction with a list of that entities' legitimate voters.

This could both reduce fraud, as well as eliminate the effect of those who only consume tax dollars. Moreover, those wishing to vote would have an added incentive to earn sufficient income on their own to outweigh any government transfer payments.

Wednesday, April 27, 2011

Picking On Big Oil

When Wonderboy held his town hall meeting in reaction to Paul Ryan's budget, he excoriated "Big Oil." Such an easy target.

Going down a well-trodden road, the First Rookie attacked large US oil firms for making money and receiving various tax preferences.

Even this Tuesday morning, as I write this, Ed Rendell, Pennsylvania's former Democratic governor, is attacking the same firms for making so much money recently by way of higher oil prices.

Both Democrats ignore a fundamental reality voiced by an oil industry commercial I saw (again) last night. It features an attractive blonde woman informing viewers that "Big Oil" is, in fact, largely owned by pension funds, endowments and US individuals at large.

And that is my point.

What is the objective of our president attacking companies which are widely-held by the public, either via pension funds or individual accounts, for being successful?

Can't these Democrats see that they are essentially attacking the principle of the "American dream" of having access to a better economic life?

To hear Rendell and Wonderboy tell it, Chevron and ExxonMobil are still owned by the Rockefellers. That hasn't been true since the Standard Trust was broken up early in the last century.

These politicians needs better handlers crafting their messages so they at least bear some resemblance to modern day reality.

Big Oil is owned by America. More profits for Exxon means capital gains, dividends, or both for the average US individual, either through private accounts or their pension funds.

Big Oil enjoys tax preferences in order to incent them to spend money to buy leases and drilling exploratory wells in the US. If those tax preferences are eliminated, guess what? Overseas sources of oil become relatively more attractive.

But that, of course, is exactly what the administration claims it doesn't want.

So which is it?

Maybe the answer is to flatten taxes so that there are no preferences anywhere? So that tax policy is no longer used as either a political club or by officeholders to dispense favors for campaign contributions?

But, as it stands, those same existing tax preferences put money into the pockets of....the average American.

And that's the truth.

Tuesday, April 26, 2011

Alan Blinder's Smear of Paul Ryan & His 2012 Budget Proposal

Last week, the Wall Street Journal published a political editorial by Princeton's Alan Blinder entitled Paul Ryan's Reverse Robin Hood Budget. The piece was notable because Blinder is an economist, yet the bulk of the article is unsubstantiated political attacks on Ryan and his 2012 budget proposal.

Here's how Blinder began his screed,

"Why do I oppose Rep. Pauly Ryan's plan for reducing the federal budget deficit, the one House Republicans approved overwhelmingly last week? Let me count the ways. Actually, since there is not enough space on this page to count them all, let me just hit the highlights."

He does, however, understand the key issue, when he writes,

"The no-so-hidden agenda is clear: to shrink the government drastically."

Blinder describes Wonderboy's second, reaction budget, as "another huge improvement over the Ryan plan."

Unlike an economically-oriented piece by, say, John B. Taylor, Alan Reynolds or Brian Wesbury, Blinder simply goes political, with a few selected statistics to support whatever he is ranting over in a particular paragraph.

That's odd, since Blinder is usually given space on the Journal's editorial pages for economics pieces.

Since he didn't bother to ground his editorial in economics, Blinder may be fairly judged on simply the politics and logic of his arguments.

Looking back over the past few weeks of posts, including this one concerning irrational expectations for social spending programs, as well as posts discussing Journal editorials by Taylor, Reynolds and Phil Gramm, it's easy to see that Blinder is one of those liberals living in a dream world.

Specifically, he has fallen into the Democratic party's deception that has been underway since 1935, when Social Security began. Simply put, unsustainable social welfare promises were made by some half-witted members of Congress, to be implemented in one of the nation's, if not the world's worst-designed systems.

Once these promises had been in place for 30 years, they became immutable social compacts. Sacred promises from a federal government newly-empowered in the 1930s and by WWII.

The trouble is, Social Security, Medicare and Medicaid, as designed, were never sustainable or affordable. At best, they should have been designed as current-year funded social spending in the manner of proportional contribution, not defined benefits.

Further, they should have been billed as good-faith attempts by the federal government to help the least fortunate in the country, to the ability that the rest of the citizens could afford, modified going forward by best ideas.

Instead, we got a set-in-cement, common-pool, defined benefit approach for the ages.

Someone of Blinder's intellect and education should know better than to demagogue Ryan's plan as unfair and mean-spirited. The truth is, Ryan is right when he says that if we don't radically alter these programs now, they'll never survive another 25 years without bankrupting the US.

It's pointless to compare an existing plan which recognizes reality with 50 year old promises grounded in ignorance and false assumptions.

Monday, April 25, 2011

John Taylor's Simple Spending/GDP Chart

Economist John B. Taylor wrote an editorial in this weekend's edition in which he simply focused on how federal spending has exploded under Wonderboy from its much lower prior levels, as expressed as a percentage of GDP.

Here's the chart he produced.

Scary, isn't it?

Taylor asks why we can't simply return to federal spending levels, as a percent of GDP, that we experienced prior to 2009? Otherwise, as Taylor's chart demonstrates, Wonderboy plans to lock in new, higher levels of spending which are unusual and, ultimately, unsustainable.

Good question.