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

- attributed to NY State Judge Gideon Tucker

Friday, August 19, 2011

Bachmann's Fatal Mistake- Gasoline Price Promises

I think Michele Bachmann is gathering momentum in demonstrating that she truly is not yet ready for national political prime time.

One pundit noted, earlier this week, regarding Paul Ryan's being coaxed by GOP moneymen, to consider a presidential run, that running a national campaign will be far more difficult and complex than running to represent Janesville, Wisconisn in Congress.

Obviously, that goes for Bachmann, as well.

But I think Bachmann just made a fatal error. Last night I saw video of her on one of the Fox News programs promising that, if elected, gasoline prices will be less than $2/gallon.

I was stunned, but not totally surprised. This is Bachmann displaying an inability to distinguish Tea Party desires for less government and more free markets, and raw, fawning populism along the lines of the ancient 'bread and circuses' Roman emperors.

A more mature, wise and seasoned Bachmann would have said, on the same topic, something like this,

'When Obama came into office, gasoline was at $1.75. What are you paying now (over $3)? That's because his deliberate anti-oil, anti-coal energy policies are driving up the price of all fossil fuels except natural gas. But we don't yet put natural gas in our car's fuel tanks.

If I'm elected president, I'll reverse his destructive energy policies. I can't, of course, control the price of gasoline or oil- that's the job of the global free markets, in response to global supplies and demand. But I can promise that I'll return as much of this nation's energy policies to free market principles as possible, eliminate the DOE, and transfer whatever useful information-collection and other elements to their most-productive homes in other federal agencies.

The bottom line is in my administration, we'll make responsible, affordable energy a key policy objective.'

Instead, Bachmann comes off as a modern-day King Canute, commanding the price of US gasoline to fall.

Very foolish.

For me, this pretty much spells and end to her viability as a presidential candidate. This sort of dictatorial lunacy will successfully position and portray her, as I and others have already noted, as the GOP version of Wonderboy. An inflexible, power-mad ideologue.

Thursday, August 18, 2011

Wonderboy's Bus Tour

There is much to find humorous about Wonderboy's Midwestern bus tour this month.

First, I guess, is that he succeeds in appearing to be just another candidate for his own office. What with Sarah Palin, Michele Bachmann and who knows who else is careening around Iowa and nearby parts in a monster bus, the First Rookie seems like just another of the bunch.

Except that since he actually lives in the White House, it's hard to believe anyone in those states actually believing he is an 'outsider.' Which is what the bus thing is supposed to make his would-be supporters believe.

As we've learned in nearly three years of suffering through his presidency, Obama does not have a common touch. He's not a retail politician in the same vein as Michele Bachmann or Rick Perry. He always comes off as a bit stiff and arch.

Frankly, in that regard, he reminds me of George H.W. Bush, whom I liked. But I thought he lost his re-election on the day that he was caught on camera buying a pair of socks in a mall in Maryland. Saying that he was doing his part to spend money and ease the recession. Marveling at a UPC scanner.

George Sr. just looked totally out of touch with the reality of everyday American life.

So, too, does Wonderboy. Attempting to blame Congress for his own failings. Crying "Get It Done!" as if the federal government's spending binge was the GOP House's idea. So maybe what Obama really means to do is castigate Frisco Nan and Harry Reid for their spending in the last Congressional session? Before last November's election?

Then he's running around complaining that the rich- which is now down to only $200K/year for individuals- don't pay enough taxes! As several Wall Street Journal editorials have noted, Wonderboy rails against "millionaires and billionaires," but it's the "thousandaires" whose money he's really after.

So many muddled messages in the heat of a Midwestern summer. But at least Wonderboy is on the bus. Looking populist. Taking his cue from Give 'Em Hell Harry Truman. Although not everyone could commandeer trains and tracks like Harry did. Compared to his whistle-stop tour in what Karl Rove reminded viewers on Fox News was the last month of the campaign, Wonderboy's using a large bus is decidedly un-Presidential.

More like a country singer's tour bus than what one would expect of a sitting President.

Wednesday, August 17, 2011

Buffett On Taxes

What do Wonderboy and his favorite billionaire, Warren Buffett, have in common? They both run organizations which have recently suffered a credit rating downgrade.

But being a billionaire doesn't stop Buffett from being used and quoted by the First Rookie at every opportunity for saying the rich should pay higher tax rates. Or more in taxes- Buffett isn't clear on that. But he seems to mean the former.

In this recent post I quoted Stephen Moore's explanation of Warren Buffett's relatively low effective tax rate. To wit,

"Democrats in Congress routinely cite Mr. Buffett's tax confessions as irrefutable evidence that tax rates on the very rich are too low and the system is unfair. And the system would be unfair, if Mr. Buffett's tax facts were the whole truth. But they aren't.

I don't know the details of Warren Buffet's personal taxes, and he hasn't made them public. But the IRS does provide reliable data on effective tax rates—the overall share of their income that various groups pay in federal income taxes (not including state or local taxes) after accounting for all deductions and exemptions. These are different than marginal tax rates, which are paid on the next dollar of income and now peak at 35% for individuals.

So how does Mr. Buffett arrive at such a low personal tax rate? He may have been referring to a 2010 IRS study of the 400 richest American taxpayers, a list he's probably on. It showed those people paid an effective federal income tax of 18.1% in 2008.

Yet that study crucially omits the corporate income tax, which is mostly borne by the owners of companies.

Mr. Buffett owns about one-quarter of his investment company Berkshire Hathaway, and his shares are worth about $38 billion. This wealth is mostly stored in what are technically called "unrealized capital gains." Eventually when those gains are converted into income, he will pay a capital gains tax. Even so, in 2008 Berkshire paid $3 billion in corporate taxes. And since Mr. Buffett is the principal owner, he shoulders a big share of that tax.

The reason for the light capital gains and dividend tax is that corporations pay up to a 35% tax on their profits before a dime of it is passed on to shareholders. The real tax rate on corporate income paid to individuals through capital gains and dividends is not 15%. It is closer to 45% once you count the tax on corporate profits. If the dividend tax rises to 20% next year from 15% today, then the total tax on dividends paid to shareholders would be closer to 50%, and that doesn't include state and local taxes.

Overall, though, Warren Buffett is wrong on taxes. The tax system is already far too reliant on the wealthy to pay the government's bills. Taxes on millionaires and billionaires are already near a record high in terms of the share of all income taxes paid. And the effective tax rate on this group is much higher, not lower, than any other income category. The best way to balance the budget is for the economy to produce a lot more American success stories like Warren Buffett."

Perhaps it's Wonderboy's complete detachment from the world of business and how the money that the federal government taxes is initially earned that leads him to think Warren Buffett is a guy who creates jobs.

Buffett is a money manager. Doesn't our president realize that? Buffett didn't invent anything. He didn't create a company. In fact, the one with which he's most closely associated, Berkshire Hathaway, is the name of a former clothing manufacturer which Buffett acquired.

If anyone were to be a true poster boy for a wealthy person who created tangible products and wealth, it might be Steve Jobs. Or the Koch brothers- but they're conservatives. So I suppose they wouldn't do.

How about Jon Hunstman, Sr? He's probably conservative, as well.

But Buffett is not the best exemplar of someone who has created much from nothing, and complains that he pays too little in taxes.

Further, even Warren confused the issue when he stated that he was very wealthy, then spoke of his low effective tax rate. You see, taxes are on income. Much of Buffett's wealth is, as Stephen Moore noted, in unrealized gains on Berkshire equity.

Maybe even ol' Warren isn't really clear on just why he pays what he pays. But one thing is sure- Warren always plays nice with the current administration, in order to avoid being the victim of a federal witch hunt. I think the tax issue is no exception.

But he does seem to be misinformed on just what share of taxes paid to the federal government are from very high earners. And when a group is that small, does anyone really believe that a single person in the group represents the views of all of the group?

I doubt it.

One thing of which you can be sure, though. When Wonderboy appears before a crowd of lower- or middle-income people, his rich-baiting calls for more taxes from higher earners is going to sound great. Especially if, thanks to the president's policies, those people have virtually no chance of becoming high earners, and, so, just like the president, evince an attitude of envy and greed when it comes to those who have earned more income than them.

Tuesday, August 16, 2011

More Reservations About Michele Bachmann

My prior posts concerning Michele Bachmann (spelled incorrectly in the label) all mention her inexperience as an executive.

In my last post I repeated a concern, recently voiced by Dick Morris, that she risks being the conservative or Tea Party equivalent of Wonderboy- long on ideology, short on experience, and no willingness whatsoever to compromise- ever.

As I listened last night to various pundits on Fox News discuss the Iowa Straw Poll results, perhaps Bernie Goldberg's comments on Rick Perry's and Michele Bachmann's religiosity caused me to reflect anew on that strain of the Republican Party.

Goldberg's point was that, in the modern era of campaigning, no candidate can any longer expect to speak to just the audience in front of her/him. Stand-in hostess of Bill O'Reilly's program, conservative radio talk show maven Laura Ingraham, tried to excuse Bachmann's confused explanations regarding her 'submissive' comment by saying that she said it to a friendly church-going crowd.

Goldberg politely but persistently disagreed with Ingraham, noting that Iowa has a preponderance of Evangelical Christians, but that's not going to be true of the rest of the country, and, specifically, not of New Hampshire.

I think he's got a very important point.

For this election cycle, softer social issues are less likely to matter in unseating Wonderboy than clear, concise stands against larger government with more spending, and for a more vibrant private sector. Jobs aren't really the issue, so much as private sector investment and activity. Ideally, jobs will follow, but, really, how, where and when is something we really just have to leave to the private sector.

But Goldberg's point implies that by wearing her faith and religion on her sleeve, Bachmann is probably making a big mistake. And, more fundamentally, may simply be a really bad choice for GOP voters to make. Her insistence on making religion so prominent in her campaign is probably not a winning approach among independents.

Perry has ten years of gubernatorial experience with which to leaven his own religious focus. I don't personally agree with Dick Morris' semi-prediction that Perry will lose to Bachmann in Iowa, to Romney and Bachmann in New Hampshire, and win South Carolina but become a South-only candidate.

For me, considering what occurred in Iowa, then listening to critiques of Bachmann's actions, statements and attitudes in the past week or so, the real concern is that, somehow, the GOP may end up with the wrong presidential candidate. One who won't attract sufficient numbers of Tea Party-like independents.

Romney, everyone generally acknowledges, is soft on real fiscal conservatism. He gave Massachusetts RomneyCare, and now tries to paper over that gigantic mistake. Don't bet on him having true religion when it comes to Tea Party-style fiscal conservatism.

Perry is very populist in his orientation, but I can't stop thinking, as I listen to him, that the nation just isn't ready for another Texan Republican as president. Maybe unfair, but that's what I think.

I don't think Bachmann is really presidential material because she is so strident about her independent stands, while seeming incapable of articulating more productive solutions she would prefer. I suspect that, like Wonderboy, she's a better campaigner than she would be a president. She might even have difficulty with a Republican-controlled Senate and House which are not as far-right as she is.

Karl Rove mentioned that he's heard stories that Chris Christie and Paul Ryan have been so pressed by influential GOP moneymen that both have promised to reconsider their very public refusals to run for president.

Living in New Jersey, I have a close vantage point on Christie. I agree with his belief that he's not ready. He hasn't even cemented his accomplishments here, and makes the occasional public gaffe, like the now-infamous helicopter ride to his son's baseball game.

Paul Ryan is probably more than ready for the Oval Office. In the classic fashion of a manager who has grown into his boss' job, Ryan has done more presidential work as chair of the House Budget Committee than anyone else in Washington. My only concerns are losing him in the House if he loses the nomination and/or general election, and that he may succumb to the Phil Gramm disease. That is, the president is more than accountant-in-chief. Ryan's strengths look good right now, but when actually voting for president, he may look a little narrowly-described.

Then again, if Ryan can pull the independents away from Wonderboy, who really cares? He might be the guy.

Monday, August 15, 2011

The Iowa Straw Poll Results

Well, yesterday's Iowa straw poll results are in, and Tim Pawlenty, though finishing third, is already out.

Michele Bachmann took first by 152 votes over Texas Congressman Ron Paul in what was reported as the second-heaviest straw poll turnout ever.

Oh, yes, and Rick Santorum came fourth.

I hadn't written a post on the Republican Ames debates of last week because I personally found it so predictable. But I enjoyed Dick Morris' commentary about it on Fox News. How he called Gingrich 'cranky,' and Ron Paul a 'flake' who totally marginalized himself by declaring it okay to let Iran have nuclear weapons.

Thus, it shouldn't be too comforting to see Ron Paul run such a close second to Bachmann. There's reason to doubt the electability of either among independents, who will of course determine the 2012 presidential election.

Of the two, though, I'd have to guess that Bachmann is the more probable choice among independents.

Unfortunately, some credible stories have come out in the past two weeks depicting Bachmann as a media-seeking, publicity-crazed, rather unattractive person in private. And despite Bachmann's intentions, Pawlenty's criticisms were correct when he noted that for all her efforts, as merely one of 435 Representatives, her so-called 'leadership' against the TARP, the debt limit increase, and ObamaCare, came to naught.

And, of course, Texas governor Rick Perry's entry further complicates things. Romney didn't really take the Iowa straw poll seriously, leaving Bachmann, at best, nipping at Romney's heels. Perry's poll numbers put him among those two, but, then, he has yet to be seriously tested either by other candidates or the media.

My own hunch is that Romney is probably the conventional GOP favorite, sadly, along the 'it's my turn' line. Bachmann is probably more popular and trustworthy among independents.

And, of course, as I've written before, while Bachmann has plenty of passion and very explicit, desirable beliefs for independents, she also shares Wonderboy's lack of executive experience.

Romney is not trustworthy, too glib and a bit too distant and dispassionate, but has the credentials on paper to be a good centrist president.

From here, we'll just have to see which of the three GOP frontrunners capture the hearts of independents.