I've been checking some of the Drudge Report links (principally to the Guardian columns) on the expanding Climategate scandal, most recently focusing on inaccessible questionable data from Chinese rural/urban weather station data in a key 1990 study, co-written by beleaguered Professor Phil Jones (i.e., of the infamous "hockey stick" plot). What's particularly instructive is the hostile reaction by the progressive environmental policy advocates; to a certain extent, defensiveness of scientists and policy makers who are vested in climate change policy legislation goes with the territory and is expected. If you read the comments following the Guardian post, you see a predictable response pattern: they argue that even if any of the Jones' studies are flawed, those studies are not material to the preponderance of the scientific evidence; they also attack the scientific merit of skepticism.
Let me make my position clear: I don't believe that there's a domino theory in effect--that if Jones' papers were invalidated, the whole of subsequent climate change research collapses, but it's very clear that Climategate showed unconscionable, unprofessional behavior, including attempts to delete relevant emails and to gain control over key journal editorial boards to rule out dissent in peer-reviewed journals, and evasion of requests for study data. There have to be internal controls in place to separate scientific activity from policy advocacy, and scientists need to be more vigilant and proactive in disavowing misleading or unsubstantiated claims by advocates and alarmist rhetoric and show greater tolerance for alternative points of view. They also need to address, if indeed the evidence is so compelling, why weren't relevant key papers challenged by other scientists in print, and why did unfounded predictions (e.g., the Himalayan hypothesis) find their way into a Nobel Prize-winning report? Why are they more focused on personally attacking skeptics than addressing a very serious allegation of scientific fraud? Where is the outrage in the scientific community over Climategate evidence suggestive of withholding data, manipulating scientific boards, and destroying emails?
The Budget, Jobs and the Conservative/Liberal Divide
The budget games going on by the Obama Administration are beyond beyond misleading; they border on the insulting. Take, for instance, their disingenuous classification TARP legislation as a period expense in terms of Obama's allegedly inheriting a trillion-dollar deficit. We really don't have the equivalent of a national balance sheet, but basically the TARP package is more like a category of national assets, and the TARP loans are receivables to the government. They are liabilities to the firms, whom are expected to pay back the Treasury. Of the $575B committed, $500B has been disbursed, and $165B has been returned. Of the net loans outstanding, over $200B are with AIG, Fannie Mae, GM, and Freddie Mac. (In interests of full disclosure, AIG, Fannie Mae, and Freddie Mac were big source donors to Obama's campaigns (relative to other candidates) , and Obama's GM interests are motivated by the auto worker unions, which have also heavily donated time and resources to the Democratic Party.) In fact, the loans should provide interest income to the government. On a side note, you would think that if Obama is going to bash the 828 TARP recipients, it would be the biggest deadbeats...
Another example of political sleight of hand involves the preposterous claim that you can add more patients to an already inflationary health care sector, throw in a growth in federal bureaucracy, and actually cut the deficit. Those bottles that Obama and other Dems carry around? It's not water--it's snake oil. Whether you're talking about cutting Medicare funds (when reimbursement rate for doctors overall already is some 20% or so below market rate), not to mention an unfunded Medicare mandate of some $36T, or soaking the rich, we are also talking about staggered benefits (and let us not forget that state experiments to date on expanded health care have consistently underestimated costs of their plans) with costs front-loaded to artificially lower the cost of the "reform".
The Daily Caller has looked at Budget Director Orszag's claim of $1.2T in cuts over the coming decade (with another $9T growth in the national debt--i.e., $20T national debt) and notes at least $700B of those cuts are doubtful, e.g., nearly $300B by lowering the tax benefits for charitable giving by higher-income households, $100B if health care passes, some $90B in new bank fees, and another $250B from the President's announced freeze (if it goes beyond the specified 3 years). And we are not even talking about solvency issues in terms social security and Medicare, with many baby boomers responding to the tough economic environment by filing for early social security.
Obama's budget also continues to push an income tax burden in a system already too progressive with another $1.1T in tax hikes relevant to higher-income households. History shows that the well-to-do change behavior in response to changes in tax laws; for example, Clinton's 1993 tax hike didn't raise as much revenue as forecast. Obama is trying to return to the "golden age" tax rates (keep in mind that occurred with a GOP Congress bent on rejecting Clinton's gold-plated budget requests)--only he hopes to squeeze more blood from a stone, by trying to maximize tax revenue from higher-income taxpayers by lowering the amount of their deductions (e.g., for charity) and/or increasing their investment tax burden.
But let's also recall patently misleading rhetoric traditionally used by Democrats. Remember how, for instance, Bill Clinton attacked George H.W. Bush for agreeing to a budget compromise including tax hikes, contradicting his famous "read-my-lips" promise? Never mind, in fact, Bush's earlier budget with relevant cuts was considered a non-starter by the Democratic leadership. And then Clinton takes office and all of a sudden decides what's needed is a new tax HIKE, not a rollback of the tax hike he criticized during the campaign. We see the same type of disingenuous, politically-motivated attacks by Democrats by specifically pointing out the now popular Medicare prescription drug plan wasn't properly funded; all this sounds very fiscally laudable--until you realize most Democrats OPPOSED the new entitlement, wanting one TWICE AS EXPENSIVE (also without sufficient funding). It basically takes chutzpah.
What we see from Obama is ZERO attention on how to stimulate organic economic growth--what kind of tax policies, regulatory burden, federal mandates, etc., support the time, effort, and resources of entrepreneur and other investors to put money into capital and human resource investment. Instead, Obama is trying build progressive principles (e.g., on deductions and investment tax rates) on an income stream already subjected to progressive rates. The net effect is to compound progressive tax rates. He is effectively raising the costs of giving to charities or investing; if we go back to the law of supply and demand: e.g., you raise the cost of donating, you get fewer donations.
No, we need more than $17B in budget cuts when we talk about nearly doubling the national debt over the coming decade. Whereas new tax incentives for small businesses help, we still see an administration which has structured its stimulus packages to favor overextended consumers over business payroll tax cuts, idiosyncratic, high-cost projects with dubious multiplier effects (e.g., the high-speed train between Orlando to Tampa which will probably need huge subsidies once operational) versus, say, rebuilding the national power grid, while taking baby steps towards nuclear power plants and offshore exploration (if the Democrats think the underwear bomber and a corrupt health care reform bill hurt them in solid blue Massachusetts, just imagine what will happen if Iran effectively shuts the Straits of Hormuz, leaving the world's leading economy in a crisis beyond the oil embargoes of the 1970's, each day increasing its dependence on foreign oil because of environmentalists and Democratic obstructionist tactics.)
But the Democrats will tell you, we are doing our part--take wind power. Which sounds good until you discover you need to have a seamless energy supply to kick in when the wind isn't blowing, with wind plants operating at 20% efficiency, to mid-40% for coal and up to 85-90% for hydroelectric plants (vulnerable to droughts). Nuclear power has a very high operational capacity with operating costs competitive or cost-advantaged with fossil fuel plants and wind-power much higher.
The reason I'm discussing this is the fact I cannot understand Obama's obsession with boutique tax cuts and boutique energy solutions, and I think it's characteristic of his politics as a whole. What I'm looking for is highly efficient utilization of federal revenues, and expensive, boutique, nuanced solutions are an indulgent approach we can't afford in terms of dealing with the status quo.
And while we're on the topic: I suggest that Obama consult with Larry Summers on his own economic team over the worthiness of investment tax cuts (not to mention reading up on JFK's relevant tax cut policies and their subsequent effects on economic growth).
Political Cartoon
This Nate Beeler cartoon shows what IS clear--the public doesn't want what the Dems have been cooking: a 2000-page bill of government-managed health care. If you trust how government handled the economic tsunami, you'll love how they manage 16% of the nation's economy. $1.5T deficits? You ain't seen nothing yet...
Musical Interlude: My Favorite of the King of Rock 'N Roll
The following video is from the greatest TV special ever--Elvis Presley's 1968 Comeback special.
Elvis Presley, "If I Can Dream"
