Quote of the Day
I hear and I forget.
I see and I remember.
I do and I understand.
Confucius
Monthly Blog Readership
There was a modest readership boost to a 3-month high (but still only about a third of the readers I had a year ago and roughly a half of what I had at the start of the year). I have noticed a few anecdotal issues with Google searches on the blog and suspicious stretches of no reader access to the blog.
For example, as I write, I haven't shown a pageview my blog since the 6 AM hour--some 18 hours ago. A progressive complaining about my Fed writeup or perhaps a fair use complaint of the heavily filtered and marked-up excerpt of Higgs' column I linked to? The latter would be frivolous in nature; much of what I excerpted and highlighted were points I have stated myself dozens of times in original commentaries. The basic point of the Higgs' excerpt was businesses not investing using commonly available government statistics, and it is not that surprising because progressives keep complaining about banks not lending, businesses not investing mountains of cash. Higgs is not discussing the Fed at all in this excerpt. What was my point? The nature and extent of Fed intervention in the economy is mostly pushing on a string with very bad unintended consequences. Think of an economic recovery like a fragile fire, and Democrats are dumping 2000-page bills on top of it, snuffing the recovery out. I'm arguing that the time you discuss new programs or regulatory regimes is AFTER you get back to a robust economy.
But the Democrats are the ultimate political opportunists; they had their best setup in years to ram their partisan agenda against a nearly powerless, vastly outnumbered minority on its heels following two blowout elections. They are totally clueless, of course. Let me give a minor example. A way that companies take on new employees is through contract for hires, typically with no benefits other than employer payroll tax contributions (if that). The last thing they want to hear about is NEW benefit costs or mandates (e.g, ObamaCare): they find it risky enough to bring on new workers with EXISTING benefits. What's my point? It's obvious from preceding context: what the Fed should be doing is jawboning misguided, counterproductive federal policies, unsustainable spending, and trillions in unfunded liabilities to seniors and others; those problems feed their own bubbles, the last things the Fed Reserve needs to worry about.
Getting back to the blog, it does seem that the readership has stabilized. Writing a blog is like writing songs; you can write something that you think is very well-crafted, and it barely registers a blip, and then one day, like September 12, you write a rant (in this case, about the Obama jobs bill--there were other things in that post, but I'm assuming it's the rant) and it spreads like wildfire--like 5 times the usual readership. It's never really clear what makes for a popular post. For example, I've written over the past few days what I consider some of the best, most clearly written posts around on social insurance and the Fed's dual mandates (I read literally dozens of other posts--I know what's out there on the topics), and I only got average number of pageviews.
Similarly, in the music field, you sometimes read about a song track that somehow got added on a CD at the last minute, e.g., Bob Carlisle's sentimental song about a father watching his baby daughter grow up, "Butterfly Kisses", that turns out to become the artist's signature song, a rare #1 crossover hit by a Christian artist over a decade ago. The song was so popular when it came out, I remember a music store tethered copies of the CD so they wouldn't be stolen.
Once again, only a modest number of international pageviews, with German and Russian readers tying for the monthly lead. My top 3 overall country leaders (since statistics became available spring a year ago), Denmark, South Korea, and Great Britain, have not shown a significant number of pageviews for the last few months combined.
Elizabeth Warren:
Same Old Same Old Social Democrat Populism
[This speech is in the public domain and has been reprinted all over the web. My only reason for printing Ms. Warren's speech here is if, in the future, the above embedded Youtube video is withdrawn.]
Transcript: "I hear all this, you know, “Well, this is class warfare, this is whatever.”—No! There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that maurauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
Senator Scott Brown (R-MA) is a grown-up and should easily make short work of this predictable demagogue rehearsing the same old same old progressive talking points. Let me address the first part of partisan rhetoric not reprinted above. Ms. Warren mocks the GOP fiscal conservatives, using the alleged tax giveaways of (less than) $1T in higher bracket tax hikes, the cost of Medicare drug coverage late in President Bush's first term, and the wars in Iraq and Afghanistan.
How do we dispose these feeble-minded objections? Let me count the ways... More seriously, first of all, if Ms. Warren was more knowledgeable about federal revenues, she would realize that the sharp decreases in marginal top bracket tax rates after the Wilson Presidency, in the Kennedy/Johnson Administrations, in the Reagan Administration, and in the Bush Presidency (after the 2003 tax cut), did NOT show a collapse of federal revenues. In fact, the highest tax collections in American history were achieved during the Bush Presidency--NOT the Clinton Presidency. It's a fact; look it up. What's the difference? FEDERAL SPENDING. Now was it, as Warren suggests, a giveaway to the rich? No. By cutting taxes, Bush INCREASED the tax base. And not at the expense of the middle class, because the relative shift in tax burden was progressive in effect. And tax increases also did not improve federal revenues. That's because raising taxes decreases the tax base (at least once you reach a sustainable income level). But more to the point, even if you got an extra $70B a year from higher tax rates, Ms. Warren conveniently forgets that some three-quarters of the tax cut went to the middle class. Now if Ms. Warren was truly sincere about the lost revenue of tax increases, how could she simply ignore the far more significant tax cut "lost revenue" going to the middle class? Her whole line of reasoning is arbitrary and lacks any serious credibility.
Now let's talk briefly here about the Medicare drug benefit. Many conservatives, including myself, knowing that Medicare was even in worse financial state than social security, did not want to add a Medicare benefit that wasn't funded. As I recall, the talking point at the time was that funding of prescriptions would pay for themselves by controlling for far more serious health problems we were going to have to cover under Medicare anyway. But Ms. Warren is also arguing entirely disingenuously here. Is any Democrat seriously going to argue that Democrats were willing to let seniors pay for high cost of prescription drugs on a limited income? So that money was already going to be spent anyway, and no Democrat at all wanted to have seniors (or the middle class) pay for the drugs. There's only one bill they wanted to write. (Can you say the top income-earners?) Did Speaker Pelosi ever once seriously decide to repeal the Medicare drug benefit? ARE YOU KIDDING? That would have been the most fiscally conservative thing to do. No, in fact, Pelosi took great pride in passing the "doughnut hole" subsidies, which INCREASED, NOT DECREASED Medicare costs
No, the Dems have largely focused on two points: they wanted to institute price controls on prescription drugs (or a thinly-veiled substitute measure: pharmaceuticals often have to negotiate prices under state-run health programs like in Canada to maintain market share globally) and filling in the benefit coverage "doughnut hole" (where the insured paid the deductible amount in drug coverage) Once you cover your fixed costs--your overhead, etc., the main cost issue is of meeting or hopefully beating variable (the time and materials for medication production). In essence, by the government importing American drugs from Canada, the pharmaceuticals would lose some of their ability to cover fixed costs because domestic sales would be cannibalized. The correct policy response would not to engage in crony capitalism or de facto ineffective price controls but to promote rigorous competition in drugs by shortening time of approval for competitive drugs.
Now let's talk about Iraq and Afghanistan. Ms. Warren would have you believe that there would have been NO costs for the Iraq and Afghanistan wars/nation rebuilding of about $100B/year. This, once again, is entirely disingenuous (among other things, Obama certainly hasn't achieved any cost savings, and keep in mind that the Senate Democrats could have filibustered relevant funding from the get-go; Democrats like Hillary Clinton have complained that "feeble-minded" George W. Bush somehow misled them on war authorization, but that's just a politically convenient excuse. Let's put this discussion into perspective: the first Gulf War had a lot to do with Iraq's conquest of Kuwait and Saddam Hussein's anger over Saudi's not forgiving part or all of loans funding its prior war with Iran. The Saudi king asked for American military assistance because Iraq's military was within easy strike distance of Saudi oil fields, something posing an economic threat against the US and other Western democracies. American forces were stationed in military bases near the eastern Gulf border, but Islamic radicals considered a foreign "crusader" presence on Saudi soil (even far away from the crown jewels of Islam, Mecca and Medina) unacceptable and staged attacks against Americans after the first Gulf War (e.g., the Khobar Towers, the USS Cole, etc.) Osama bin Laden and Al Qaeda declared war against the US and the Western democracies by the mid-1990's. Ms. Warren, unless totally in a state of denial, knows that the Taliban sheltered OBL through the aftermath to the 9/11 attacks. In fact, most Afghanistan costs and casualties occurred after Obama became President; the Democratic talking point to that point was that Bush had been diverted from the "good war".
Now let's consider Iraq. Right or wrong, the decision to invade Iraq in 2003 was based on flawed intelligence--the same intelligence that Congressional Democrats had, in fact, also been briefed on, and let us not forget that the US had already decided during the Clinton Presidency on a goal of regime change in Iraq. There had been a bipartisan rejection of Hussein. Ms. Warren may argue that the inspections should have been given more time to work, but keep in mind that Hussein only agreed to UN inspections with over 100,000 American troops in the area. There were high costs associated with that presence.
You can argue all you want about us fighting the wrong war, but when we know the damage that a couple of dozen terrorists did with limited funding on 9/11, there was a concern about Hussein, whom had already attempted to assassinate George HW Bush on a visit to the region during the Clinton Presidency, exacting revenge against the US because of the first Gulf War; we knew that Iraq had nuclear know-how (remember the Israeli attack during the Reagan presidency?) and stocks of chemical agents when Hussein threw out inspectors in the late 1990's. There were also something like 17 UN resolutions that Hussein spurned. So there was some concern about what Hussein would do given oil revenues. Whereas I have my own issues with Bush's decision, I do understand the context.
But let's go beyond that. Ms. Warren wants to pretend that up to $100B/year or more would have been saved by simply not invading Iraq. That simply is demonstrably false. The US and Britain were patrolling no-fly zones and had to maintain a large, very expensive operation in the area to contain Hussein. At least one estimate in the lead up to the liberation of Iraq estimated containment costs (of Hussein, with no invasion) as between $300 to $700B. (The estimates of the invasion cost had lower to higher limits.) If we simply picked the midpoint of the two ranges, the costs were within $100B (not per year but aggregate costs).
So, putting it all together, the Democrats were keeping the 75% of the Bush tax cuts that went to the middle class (just ignoring the pro-growth benefits of higher-income discretionary spending, saving, and investments of the $70B/year, because, of course, the government makes better use of that money by investing in Solyndra, shrimp on treadmills, etc.), they were arguing we weren't spending enough on the Medicare drug benefit, and they were knowingly ignoring the costs of containing Iraq. And even more to the point, what has been Obama/Democrats' response to these issues during the 111th Congress with massive majorities? Did they pass the class warfare tax hikes? No. Did they make Medicare more solvent? No. In fact, they tried to double-count savings to unrealistic reimbursement cuts (despite repeated doc fixes or rollbacks to past automated provider cuts) in order to cost-justify ObamaCare. And Obama has added an Afghanistan surge and Libya military assistance, with very little aggregate savings in Iraq/Afghanistan costs.
So, it's very clear, by any objective standard, that Ms. Warren's analysis is, at best, superficial and deliberately misleading. If Senator Brown, with his pragmatic center-right voting record, cannot defeat a polarizing ideologue, I don't hold much hope for the future of Massachusetts.
Now let's go onto Ms. Warren's discussion of the "social contract" and the quote at the start of this commentary. There are several different conceptualizations of the social contract, but the American political system was developed on Locke's Second Treatise of Government. Locke holds that all men have unalienable rights of life, liberty, and property. (Jefferson says "pursuit of happiness" instead of property in the Declaration of Independence, but the Lockean influence is seen in other contexts, i.e., the Fifth Amendment.) Men could use every means in self-defense of their rights but in theory consent to government to serve as their trusted surrogate in defense of their rights and agree to abide by the due process resolution of conflicted rights. Ms. Warren is referencing that when she implicitly refers to the cost of police in protecting business property.
But, of course, Ms. Warren is being entirely arbitrary in her discussion of the social contract. For example, I don't agree with a potentially infinite number of positive rights under the contract (e.g., public funding of education). Maybe I pay it forward to contributing to my church operating its own private school or I choose to home-school my children. I would also argue that the government should provide a supportive context for individual virtue, not foster an undue dependence on the resources and efforts of others.
I don't give the government a blank check up to the full extent of my unalienable rights; due process requires more than arbitrary majority rule. A system, like the federal government, where one of every two wage earners does not pay a cent towards its operations, intrinsically does not provide equal protection.
What's morally contemptible about Ms. Warren's point of view is that class-based policies are by their very nature discriminatory and unjust; we conservatives or libertarians don't disagree with cost-sharing of a minimal core government guaranteeing public health and safety, arbitration of disputed rights, infrastructure and resources supporting access to and establishment of a fair market. Those costs, however, must be limited in nature and be shared as broadly and fairly as possible; all citizens must be vested in the efficient, effective use of government resources.
If we recognize the right to work, we must ensure a supportive context for employers. When government implements policies which unduly restricts economic liberty by shifting costs burdens or risk to business, it impedes economic growth and development of supportive jobs. Entrepreneurs and businesses do not have a moral obligation to expand operations or to hire the unemployed
Political Humor
"President Obama was heckled by a protester who called him “the Antichrist.” The protestor was detained, but released without being charged, and then later he was offered his own show on Fox News." - Jay Leno
[I guess President Obama didn't recognize Glenn Beck since his Fox News show went off the air a few months back.]
"N.A.S.A. says they may never know where the satellite that crashed this week landed. They’re planning to wait until it shows up on eBay." - Jay Leno
[Pakistan said that it will eventually turn over the satellite--after the Chinese have had a chance to examine and photograph it.]
"Gov. Chris Christie keeps saying he’s not running for president. On the other hand, he would consider running for Santa." - David Lettermna
[Someone whom gives presents to people whom don't earn any income or half of the workers whom don't pay a penny towards them? Yes, President Obama IS running for Santa; Obama has always liked the fact that Santa wears a red suit... Yes, of course Gov. Christie is not going to run for President. Maybe walk at a decent pace...]
"A group of unpaid interns are suing a film company for not teaching them anything. The film company said they did teach them something: Show business is about screwing people over." - Conan O'Brien
[Just wait until college graduates hear about this...]
"The Obama campaign is offering a chance to win dinner with the president for $3. This would explain his new campaign slogan: 'Hey, I’m cheaper than Arby’s.'" - Conan O'Brien
[Obama's supporters are in a state of shock: they thought the only ones whom pay for lunch are taxpayers.I'll handle the tip: vote for change in 2012.]
"Kids need to go to coffee shops as often as possible. They need to see what happens if they major in philosophy." - Craig Ferguson
[Or else someone could send them the URL for an obscure conservative political blog whose author doesn't earn a penny for writing it.]
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Big Love"
Friday, September 30, 2011
Thursday, September 29, 2011
Miscellany: 9/29/11
Quote of the Day
One's first book, kiss, home run, is always the best.
Clifton Fadiman
Dems Pressuring Fed Reserve Chief Bernanke to Print Money
I am not an economist by training, but I do have a definite point of view. To provide a context for the current kerfuffle, the late economist Milton Friedman, a monetarist (not a Keynesian), suggested there were mistakes made by the Federal Reserve during the post-1929 period; in essence, consumers in tough economic times save more; the reduction in consumption results in price cuts as businesses seek to spark demand for their goods and services. Among other things, we have the possibility of a vicious cycle as people expect their dollar today to go further tomorrow (i.e., deflation). As aggregate demand falls, so does the labor demand to service it. Friedman argued effectively that the Federal Reserve needed to introduce an artificial inflation by increasing the monetary supply (think of it as sort of a thermostat). Friedman believed that the Fed itself triggered the groundwork 1929 crash by a misguided hike in interest rates the prior year to stem what it saw as rampant speculation in the stock market. Once in recession, the Fed mistakenly snuffed out recoveries by raising interest rates too soon (a response to gold purchases, after having dropped interest rates after the crash), prolonging the recession/depression.
Many believe that we've been in a liquidity trap, meaning that the Fed has run out of interest rates to cut and savings are high. (Recall, that has been an issue we've talked about in terms of the last two stimulus checks: the intent of policy makers was to stimulate consumer demand, but most people saved the proceeds.) Hence, a problem is convincing consumers and businesses our currency has bottomed out in terms of deflationary pressures. Take investment in bonds; with nominal interest rates near zero, bond prices are near all-time highs. A bond investor at this stage risks a drop in bond prices if and when interest rates return to a historical norm. Thus, if, on the other hand, investors see the Fed backing bond prices with relevant purchases, it can encourage investments and consumption, e.g., interest rate drops, say on 10-year Treasury bills, can drop the comparable costs of companies in borrowing.
We saw the Japanese make very similar monetary policy mistakes nearly 60 years after our Great Depression, and at some point the Japanese have attempted Friedman-recommended tactics, such as dropping interest rates to near zero and quantitative easing--which has not apparently worked as expected. This is one of my criticisms of current Fed Reserve policy: what have Bernanke and the rest learned from the Japan experience using similar tactics?
The above-cited Bullock article argues, contrary to the popular press, Greenspan and Bernanke are/were no Keynesians (i.e., advocates of government spending to stimulate demand). As libertarians, they preferred fiscal stimuli in the form of tax cuts versus what I call unduly confident progressive 'pick and choose' spending or "investments". (By its very nature, government spending is intrinsically inefficient: it gets its own self-preserving cut of the proceeds.) Tax cuts by their nature increase discretionary income, which real taxpayers (including, yes, millionaires) spend or invest, to the broadest extent of the economy instead of, say, inefficient, ineffective targeted Democratic policy preferences. No one seriously believes that Obama's "investments" in green investments, health care, and education have served as a catalyst in general economic growth.
But Bullock argues, sympathetic to Ron Paul's perspective, that fellow libertarians Greenspan and Bernanke have been far more active interventionist than most of us care for. We worry that the nature and extent of the Fed's intervention are sowing the seeds of dysfunctional growth (e.g., post-2001, in excess investment in real estate, exacerbating the bubble) and potentially economic growth-crippling hyperinflation.
A great deal of discussion has involved dual mandates of the Fed to combat inflation and unemployment, first addressed in the Full Employment Act of 1946, In 1977 and the following year's Humphrey-Hawkins, we saw the Democratic Congress and President emphasizing the full employment mandate. It's very clear that Congressmen Franks, Van Hollen and others are emphasizing the employment mandate, and earlier attacked Congressional GOP leadership's criticism of the Fed as threatening the Fed's independence. The Democrats see easy monetary policy in support of the full employment mandate as a back door stimulus.
That the same Democrats who supported massive intervention during the economic tsunami in 2008 under Bush and have continued to do the same ever since under Obama, would support interventionist policies by the Fed in support of the vague full employment mandate (a political, not monetary policy) is entirely predictable: this is the same political party which stoked the crony relationship of the GSE's increasing that market share from about 6% to nearly half of the total market, using government guarantees for its acquired mortgage notes; this is the same party which, under so-called 2000-page "financial reform" legislation signed by Obama, added materially to the empire-building Fed's responsibilities.
The Republicans are legitimately concerned that there will be unintended consequences, a day of reckoning for ongoing market interventions by the Fed; a massive flood of printed dollars is gambling with a devastating hyperinflation which will put the Fed between the devil and the deep blue sea in trying to triangulate its mutually inconsistent mandates, it has already led to declines in the currency, eroding the value of and confidence in our bonds just as under Obama, our debt now stands at 101.1% our GDP and the Obama Administration nonchalantly is projecting trillion dollar a year deficits indefinitely into the future (and that's if you believe in ObamaCare's smoke and mirrors accounting), Inflation is a cruel, regressive, hidden tax on lower-income citizens. George Will, others, and I believe that any intervention by the Fed should be limited and sparing, and its core responsibilities should be reduced to focus on inflation. Contrary to Democratic double speak, the REAL threat to Federal Reserve independence is its expanded, quasi-political responsibilities, a violation of the responsibilities of the Congress to exercise its responsibilities, not to delegate them to unelected, unaccountable individuals. If we already have high unemployment when all of a sudden inflation ramps up, the Fed may find itself in a situation like Japan is experiencing, perhaps with no dry powder left in its arsenal to combat it.
Higgs has some important observations:
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Gypsy". I'm not going to analyze this Nicks' classic song and performance. In my opinion, the song and arrangement are pure pop music genius (like the BeeGees' "Tragedy" or Marc Cohn's "Walking in Memphis"), Nicks' vocals distinctive and spot on, and I'm not into fashion, but I dig the frilly, lacy, ultra-feminine look. The retro-1920's, vintage movie star (Greta Garbo?) look is also compelling.
One's first book, kiss, home run, is always the best.
Clifton Fadiman
Dems Pressuring Fed Reserve Chief Bernanke to Print Money
I am not an economist by training, but I do have a definite point of view. To provide a context for the current kerfuffle, the late economist Milton Friedman, a monetarist (not a Keynesian), suggested there were mistakes made by the Federal Reserve during the post-1929 period; in essence, consumers in tough economic times save more; the reduction in consumption results in price cuts as businesses seek to spark demand for their goods and services. Among other things, we have the possibility of a vicious cycle as people expect their dollar today to go further tomorrow (i.e., deflation). As aggregate demand falls, so does the labor demand to service it. Friedman argued effectively that the Federal Reserve needed to introduce an artificial inflation by increasing the monetary supply (think of it as sort of a thermostat). Friedman believed that the Fed itself triggered the groundwork 1929 crash by a misguided hike in interest rates the prior year to stem what it saw as rampant speculation in the stock market. Once in recession, the Fed mistakenly snuffed out recoveries by raising interest rates too soon (a response to gold purchases, after having dropped interest rates after the crash), prolonging the recession/depression.
Many believe that we've been in a liquidity trap, meaning that the Fed has run out of interest rates to cut and savings are high. (Recall, that has been an issue we've talked about in terms of the last two stimulus checks: the intent of policy makers was to stimulate consumer demand, but most people saved the proceeds.) Hence, a problem is convincing consumers and businesses our currency has bottomed out in terms of deflationary pressures. Take investment in bonds; with nominal interest rates near zero, bond prices are near all-time highs. A bond investor at this stage risks a drop in bond prices if and when interest rates return to a historical norm. Thus, if, on the other hand, investors see the Fed backing bond prices with relevant purchases, it can encourage investments and consumption, e.g., interest rate drops, say on 10-year Treasury bills, can drop the comparable costs of companies in borrowing.
We saw the Japanese make very similar monetary policy mistakes nearly 60 years after our Great Depression, and at some point the Japanese have attempted Friedman-recommended tactics, such as dropping interest rates to near zero and quantitative easing--which has not apparently worked as expected. This is one of my criticisms of current Fed Reserve policy: what have Bernanke and the rest learned from the Japan experience using similar tactics?
The above-cited Bullock article argues, contrary to the popular press, Greenspan and Bernanke are/were no Keynesians (i.e., advocates of government spending to stimulate demand). As libertarians, they preferred fiscal stimuli in the form of tax cuts versus what I call unduly confident progressive 'pick and choose' spending or "investments". (By its very nature, government spending is intrinsically inefficient: it gets its own self-preserving cut of the proceeds.) Tax cuts by their nature increase discretionary income, which real taxpayers (including, yes, millionaires) spend or invest, to the broadest extent of the economy instead of, say, inefficient, ineffective targeted Democratic policy preferences. No one seriously believes that Obama's "investments" in green investments, health care, and education have served as a catalyst in general economic growth.
But Bullock argues, sympathetic to Ron Paul's perspective, that fellow libertarians Greenspan and Bernanke have been far more active interventionist than most of us care for. We worry that the nature and extent of the Fed's intervention are sowing the seeds of dysfunctional growth (e.g., post-2001, in excess investment in real estate, exacerbating the bubble) and potentially economic growth-crippling hyperinflation.
A great deal of discussion has involved dual mandates of the Fed to combat inflation and unemployment, first addressed in the Full Employment Act of 1946, In 1977 and the following year's Humphrey-Hawkins, we saw the Democratic Congress and President emphasizing the full employment mandate. It's very clear that Congressmen Franks, Van Hollen and others are emphasizing the employment mandate, and earlier attacked Congressional GOP leadership's criticism of the Fed as threatening the Fed's independence. The Democrats see easy monetary policy in support of the full employment mandate as a back door stimulus.
That the same Democrats who supported massive intervention during the economic tsunami in 2008 under Bush and have continued to do the same ever since under Obama, would support interventionist policies by the Fed in support of the vague full employment mandate (a political, not monetary policy) is entirely predictable: this is the same political party which stoked the crony relationship of the GSE's increasing that market share from about 6% to nearly half of the total market, using government guarantees for its acquired mortgage notes; this is the same party which, under so-called 2000-page "financial reform" legislation signed by Obama, added materially to the empire-building Fed's responsibilities.
The Republicans are legitimately concerned that there will be unintended consequences, a day of reckoning for ongoing market interventions by the Fed; a massive flood of printed dollars is gambling with a devastating hyperinflation which will put the Fed between the devil and the deep blue sea in trying to triangulate its mutually inconsistent mandates, it has already led to declines in the currency, eroding the value of and confidence in our bonds just as under Obama, our debt now stands at 101.1% our GDP and the Obama Administration nonchalantly is projecting trillion dollar a year deficits indefinitely into the future (and that's if you believe in ObamaCare's smoke and mirrors accounting), Inflation is a cruel, regressive, hidden tax on lower-income citizens. George Will, others, and I believe that any intervention by the Fed should be limited and sparing, and its core responsibilities should be reduced to focus on inflation. Contrary to Democratic double speak, the REAL threat to Federal Reserve independence is its expanded, quasi-political responsibilities, a violation of the responsibilities of the Congress to exercise its responsibilities, not to delegate them to unelected, unaccountable individuals. If we already have high unemployment when all of a sudden inflation ramps up, the Fed may find itself in a situation like Japan is experiencing, perhaps with no dry powder left in its arsenal to combat it.
Higgs has some important observations:
Every Keynesian seems to believe that because consumers are in a dreadful funk, only government stimulus spending can rescue the moribund economy... real personal consumption expenditure recovered from its recession decline by the fourth quarter of 2010. Continuing to grow, it now stands (as of the most recent data, for the second quarter of 2011) even farther above its pre-recession peak...Real government expenditure for consumption and investment ... is also running higher than its pre-recession level...
The economy remains moribund ... because the true driver of economic growth—private investment—remains deeply depressed. Gross private domestic fixed investment fell steeply after the second quarter of 2007, and in the second quarter of 2011 it remained 19 percent below its pre-recession peak. ...net private domestic fixed investment.. peaked in 2006, fell substantially in each of the following three years, and recovered only slightly in 2010, when the index showed net private domestic fixed investment was running about 78 percent below its level in 2005 and 2006. Here is the true reason for the recession’s persistence.... An important reason for this apprehension and the consequent reluctance to make new capital commitments is regime uncertainty—in this case, a widespread, serious fear that the government’s major policies in areas such as taxation, Obamacare, financial reform, environmental regulation, and other areas will have the effect of depriving investors of control over their capital or diminishing their ability to appropriate the income that the capital generates.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Gypsy". I'm not going to analyze this Nicks' classic song and performance. In my opinion, the song and arrangement are pure pop music genius (like the BeeGees' "Tragedy" or Marc Cohn's "Walking in Memphis"), Nicks' vocals distinctive and spot on, and I'm not into fashion, but I dig the frilly, lacy, ultra-feminine look. The retro-1920's, vintage movie star (Greta Garbo?) look is also compelling.
Wednesday, September 28, 2011
Miscellany: 9/28/11
Quote of the Day
If you have knowledge, let others light their candles at it.
Margaret Fuller
"Baby Joseph" Maraachli, RIP: 1/22/10 - 9/27/11
Joseph, the son of Canadian citizens Moe and Sana Maraachli, was diagnosed with a rare progressive neurological disorder called Leigh's disease. The Canadian government-run health system last February ordered life support cut off, claiming Baby Joseph was in a permanent vegetative state (although his parents provided video evidence of his movements and responses to tickling) and refused to perform a tracheotomy, calling it "invasive". The tracheotomy would enable the boy to die at home, surrounded by his loving family and friends. Aided by pro-life and anti-euthanasia groups and lawyers, the parents managed to get the tracheotomy performed in a St. Louis Catholic hospital (Cardinal Glennon Children’s Medical Center). My thoughts, prayers and deepest sympathy for Joseph's surviving parents, Moe and Sana; I honor and respect their worthy, unconditional love for their son.
I also want to express appreciation for the related efforts of Fr. Frank Pavone and others from the group Priests for Life, for helping the Maraachli's stand up to the heartless Canadian government and medical establishment, which had effectively sentenced young Joseph to death in a cold, sterile hospital, instead of being allowed his unalienable right to live, the priceless gift of additional months in the warmth and comfort of his home and the loving arms of his parents.
There is little doubt, as we consider an all but fiscally bankrupt US government taking on unsustainable ObamaCare and trying to push even more health service mandates on an already inflation-bound system with a limited health practitioner pipeline and accelerating requirements to accommodate an aging population and hence facing inevitable decisions on how to contain costs, that these kinds of unconscionable decisions may soon be coming to an health care provider near you, unless and until the US Supreme Court puts an end to unfettered, megalomaniac, unconstitutional federal government empire building. There is a difference between sheltering households from unmanageable costs associated with catastrophic health conditions and underwriting ordinary health related expenses, like birth control bills, annual checkups, etc. We need to avoid morally hazardous scope creep stretching into the middle class; we must vest patients (e.g., by cost-sharing) into a more sustainable health care system, into not treating providers, medications and tests as "free" resources, by engaging in healthier lifestyle choices, etc. We must have medical malpractice tort reform in order to stop redundant, unnecessary "cover my ass" defensive medicine. Government policies and micromanagement of the health care industry are a major part of the problem, not the solution; how a government which can't even balance its own checkbook can be trusted to "improve" the health care system, far beyond its level of competence, is beyond me.
Social Insurance: Some Comments
Isaac Max Rubinow, whose life spanned the turn of the twentieth century, wrote a number of relevant books including Social Insurance. He traces the evolution of social insurance through European social legislation in the latter nineteenth century, in particular Germany. Social insurance, earlier termed "workingmen's insurance", "emphasizes...the policy of organized society to furnish ..protection to one part of the population". Perhaps at risk of oversimplification, we can broadly classify social classes in terms of poverty, wage-earners (hourly), lower middle class,..., large property-holders. The primary focus of progressive legislation was on wage-earners: their pay usually did not yield much discretionary income or allow for significant accumulation of property (e.g., rainy day savings, retirement, etc.) Moreover, the work was often physically demanding, and the wage-earner only got paid for his hours of work, so if he injured himself, got sick, or was unable to keep up the pace of his work due to aging and a body breaking down under physical strain for decades, it was too easy for him and his family to drop into poverty. Even if he was able to work, he was still highly vulnerable to changes in demand for labor (e.g., recessions). (Note that under times of economic distress, wage-earners can find themselves competing with workers migrating from higher classes, e.g., a laid-off salaried employee whom cannot find an alternative salaried position.
We can broadly categorize relevant legislation by type of employment impairment: short-term (industrial accident, illness, unemployment compensation), long-term (old age, disability), or permanent (survivors). Early legislation focused on short-term impairment. Other reforms (e.g., pension) were more controversial because, for instance, old age is more of a natural stage of life than a random event.
There were different phases for providing insurance to the target population, particularly with respect to wage-earners: education (e.g., help with personal finances and establishing a savings plan), a non-profit social insurance option (e.g., making premiums more affordable by eliminating commercial profit markups), coverage of overhead/administrative costs, and then cost sharing (government partial or full premium subsidies and/or mandated employer and/or worker premiums (employee share of premium costs). There was also a phased roll-out to classes of employees: industrial, farmer, commercial, and others.
Rubinow readily admits that social insurance does not meet the actuarial standards of commercial insurance, and there are paternalist aspects to it (e.g., mandatory contributions, because many employees will not voluntarily pay even subsidized costs). There are, of course, all sorts of moral hazard for individuals not paying the true cost of their insurance (e.g., prudent work behavior, healthy lifestyles, migrating to an area with more work opportunities, saving for retirement, working beyond a retirement age even when healthy, etc.)
There are a number of objections one could make to these original progressives, of course, beyond the questions of moral hazard. The profit motive provides a natural incentive to improve costs, including administrative. The private sector has a natural incentive to gain market share by lowering price, given the supply/demand curve--including markups. There is no natural incentive for the state to improve efficiency since it could increase taxes or print money; it, by nature, is a monopoly. Companies have to pass along their costs to remain a viable going concern; a state typically finds political resistance to increasing premiums or decreasing benefits.
Today's variations of social insurance have evolved beyond the idealistic intentions of progressive legislators. For example, I know a relative (not blood) whom turned down an opportunity to take a part-time job at a nearby university because he or she could clear more from unemployment compensation. We have healthy individuals filing for public sector retirement in their mid-50's (or even earlier) from white-collar jobs; we have some enlisted personnel in the military retiring at half-pay for life in their late 30's. We have all sorts of Medicaid/Medicare fraud, the nature of which does not exist in the private sector. We have entitlement funds (social security/Medicare) with some $50T in unfunded liabilities..
The libertarian George Mason University economist Walter Williams recently penned a column called "Gov. Perry's Right About Social Security". (This deals with Perry's famous reference to social security as a Ponzi scheme.) I did want to point out a few points raised during the column, not the least of which was to list 3 Nobel Prize economists whom have called social security a Ponzi game/scheme. But he quotes social security documents which, at the very least, misled the American people by, for example, implying a ceiling in contributions, that you had some vested account: "the checks to you are a right".
The Nestor decision (below) asserts that there is no Fifth Amendment property right, the Social Security promise of benefits is not a contractual right. Nestor had paid 19 years into social security and was deported for being a Communist a year after becoming eligible for benefits. The social security law excluded deported Communists from payment. Whatever Nestor's ideology (as a conservative/libertarian, I have zero patience with Communist ideology), but this 5-4 decision was WRONGLY DECIDED.
My biggest takeaway from the column was his quoting 1937 and 1960 Supreme Court decisions:
The Nestor decision quote is judicial spin worthy of a Barack Obama speech.
As to the Helvering decision, it said social security was NOT a contributory insurance program. (This is a ludicrous state of denial of the plain truth; even FDR would consider it a form of social insurance. Some justices must have eaten mushrooms with Alice in Wonderland.) Social security is a type of annuity, an insurance company product. In theory, the government takes on the risk that you will outlive your retirement savings in the form of payroll contributions on your behalf into the system. (In reality, there is no savings account in your name, of course, because social security is a pay-as-you-go scheme.)
Remember what George Bailey said in It's a Wonderful Life when there is a run on the savings and loan just as he's getting ready to go on his honeymoon?
Fleetwood Mac, "Hold Me"
If you have knowledge, let others light their candles at it.
Margaret Fuller
"Baby Joseph" Maraachli, RIP: 1/22/10 - 9/27/11
 |
| Photo Courtesy of Lifesitenews.com |
I also want to express appreciation for the related efforts of Fr. Frank Pavone and others from the group Priests for Life, for helping the Maraachli's stand up to the heartless Canadian government and medical establishment, which had effectively sentenced young Joseph to death in a cold, sterile hospital, instead of being allowed his unalienable right to live, the priceless gift of additional months in the warmth and comfort of his home and the loving arms of his parents.
There is little doubt, as we consider an all but fiscally bankrupt US government taking on unsustainable ObamaCare and trying to push even more health service mandates on an already inflation-bound system with a limited health practitioner pipeline and accelerating requirements to accommodate an aging population and hence facing inevitable decisions on how to contain costs, that these kinds of unconscionable decisions may soon be coming to an health care provider near you, unless and until the US Supreme Court puts an end to unfettered, megalomaniac, unconstitutional federal government empire building. There is a difference between sheltering households from unmanageable costs associated with catastrophic health conditions and underwriting ordinary health related expenses, like birth control bills, annual checkups, etc. We need to avoid morally hazardous scope creep stretching into the middle class; we must vest patients (e.g., by cost-sharing) into a more sustainable health care system, into not treating providers, medications and tests as "free" resources, by engaging in healthier lifestyle choices, etc. We must have medical malpractice tort reform in order to stop redundant, unnecessary "cover my ass" defensive medicine. Government policies and micromanagement of the health care industry are a major part of the problem, not the solution; how a government which can't even balance its own checkbook can be trusted to "improve" the health care system, far beyond its level of competence, is beyond me.
Social Insurance: Some Comments
Isaac Max Rubinow, whose life spanned the turn of the twentieth century, wrote a number of relevant books including Social Insurance. He traces the evolution of social insurance through European social legislation in the latter nineteenth century, in particular Germany. Social insurance, earlier termed "workingmen's insurance", "emphasizes...the policy of organized society to furnish ..protection to one part of the population". Perhaps at risk of oversimplification, we can broadly classify social classes in terms of poverty, wage-earners (hourly), lower middle class,..., large property-holders. The primary focus of progressive legislation was on wage-earners: their pay usually did not yield much discretionary income or allow for significant accumulation of property (e.g., rainy day savings, retirement, etc.) Moreover, the work was often physically demanding, and the wage-earner only got paid for his hours of work, so if he injured himself, got sick, or was unable to keep up the pace of his work due to aging and a body breaking down under physical strain for decades, it was too easy for him and his family to drop into poverty. Even if he was able to work, he was still highly vulnerable to changes in demand for labor (e.g., recessions). (Note that under times of economic distress, wage-earners can find themselves competing with workers migrating from higher classes, e.g., a laid-off salaried employee whom cannot find an alternative salaried position.
We can broadly categorize relevant legislation by type of employment impairment: short-term (industrial accident, illness, unemployment compensation), long-term (old age, disability), or permanent (survivors). Early legislation focused on short-term impairment. Other reforms (e.g., pension) were more controversial because, for instance, old age is more of a natural stage of life than a random event.
There were different phases for providing insurance to the target population, particularly with respect to wage-earners: education (e.g., help with personal finances and establishing a savings plan), a non-profit social insurance option (e.g., making premiums more affordable by eliminating commercial profit markups), coverage of overhead/administrative costs, and then cost sharing (government partial or full premium subsidies and/or mandated employer and/or worker premiums (employee share of premium costs). There was also a phased roll-out to classes of employees: industrial, farmer, commercial, and others.
Rubinow readily admits that social insurance does not meet the actuarial standards of commercial insurance, and there are paternalist aspects to it (e.g., mandatory contributions, because many employees will not voluntarily pay even subsidized costs). There are, of course, all sorts of moral hazard for individuals not paying the true cost of their insurance (e.g., prudent work behavior, healthy lifestyles, migrating to an area with more work opportunities, saving for retirement, working beyond a retirement age even when healthy, etc.)
There are a number of objections one could make to these original progressives, of course, beyond the questions of moral hazard. The profit motive provides a natural incentive to improve costs, including administrative. The private sector has a natural incentive to gain market share by lowering price, given the supply/demand curve--including markups. There is no natural incentive for the state to improve efficiency since it could increase taxes or print money; it, by nature, is a monopoly. Companies have to pass along their costs to remain a viable going concern; a state typically finds political resistance to increasing premiums or decreasing benefits.
Today's variations of social insurance have evolved beyond the idealistic intentions of progressive legislators. For example, I know a relative (not blood) whom turned down an opportunity to take a part-time job at a nearby university because he or she could clear more from unemployment compensation. We have healthy individuals filing for public sector retirement in their mid-50's (or even earlier) from white-collar jobs; we have some enlisted personnel in the military retiring at half-pay for life in their late 30's. We have all sorts of Medicaid/Medicare fraud, the nature of which does not exist in the private sector. We have entitlement funds (social security/Medicare) with some $50T in unfunded liabilities..
The libertarian George Mason University economist Walter Williams recently penned a column called "Gov. Perry's Right About Social Security". (This deals with Perry's famous reference to social security as a Ponzi scheme.) I did want to point out a few points raised during the column, not the least of which was to list 3 Nobel Prize economists whom have called social security a Ponzi game/scheme. But he quotes social security documents which, at the very least, misled the American people by, for example, implying a ceiling in contributions, that you had some vested account: "the checks to you are a right".
The Nestor decision (below) asserts that there is no Fifth Amendment property right, the Social Security promise of benefits is not a contractual right. Nestor had paid 19 years into social security and was deported for being a Communist a year after becoming eligible for benefits. The social security law excluded deported Communists from payment. Whatever Nestor's ideology (as a conservative/libertarian, I have zero patience with Communist ideology), but this 5-4 decision was WRONGLY DECIDED.
My biggest takeaway from the column was his quoting 1937 and 1960 Supreme Court decisions:
- "Employee and employer [FICA] taxes are...not earmarked in any way." (Helvering v Davis)
- "To engraft upon the Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands." Flemming v Nestor
The Nestor decision quote is judicial spin worthy of a Barack Obama speech.
As to the Helvering decision, it said social security was NOT a contributory insurance program. (This is a ludicrous state of denial of the plain truth; even FDR would consider it a form of social insurance. Some justices must have eaten mushrooms with Alice in Wonderland.) Social security is a type of annuity, an insurance company product. In theory, the government takes on the risk that you will outlive your retirement savings in the form of payroll contributions on your behalf into the system. (In reality, there is no savings account in your name, of course, because social security is a pay-as-you-go scheme.)
Remember what George Bailey said in It's a Wonderful Life when there is a run on the savings and loan just as he's getting ready to go on his honeymoon?
You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house...right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others.What would George Bailey say today if he was the Chief Actuary of the Social Security Administration?
You're thinking of this place all wrong. As if I had the reserve fund investments in a lockbox, out of the hands of big-spending politicians, with liquid, diversified positions in dividend-yielding Blue Chip stocks, strong growing mid-caps and small-caps, commodities, and/or high-rated corporate bonds. No, your money's in AIG. And in Fannie Mae. And in Freddie Mac. And in Government Motors, where Chevy Volt sales are hot. (Not in sales--just 302 in August, but we now have first responder fire and rescue crews outfitted with Chevy Volt safety tools.) And in Solyndra, And in below-water government-backed mortgage backed securities. And in nearly $15T of other government "investments" in past spending.Musical Interlude: My Favorite Groups
Fleetwood Mac, "Hold Me"
Tuesday, September 27, 2011
Miscellany: 9/27/11
Quote of the Day
I do believe that man is a rope between animal and superman. But the superman I'm thinking of isn't Nietzsche's. The real superhuman, man or woman, is the person who's rid himself of all prejudices, neuroses, and psychoses, who realizes his full potential as a human being, who acts naturally on the basis of gentleness, compassion, and love, who thinks for himself and refuses to follow the herd. That's the genuine dyed-in-the-wool superman.
Philip José Farmer
Policy Quote of the Day
If you're Obama, you've got to feel fairly good about your chances, given the fact that you just got hit by one of the worst midterm rebukes in American history with House Democrats reduced to their lowest numbers in decades, you have a weak jobless recovery, still millions underwater since you took office (never mind millions joining the labor force), never mind a labor force that requires a million jobs a year just to accommodate population growth in the labor force, you have added, in absolute terms, a record 40% to the national debt, on track to exceeding your predecessor's amount over 2 terms just in one term with the economy being technically in recovery over 2 years now, you've gone below 40% job approval in the daily Gallup poll on multiple occasions and you've just suffered the first Treasury debt downgrade in generations.
Yet if you look at comparative polls, you've won 2 of 4 polls this month against a generic GOP opponent, you've lost only one head-to-head matchup against anybody in the GOP field (Romney), and your most competitive opponent Romney has lost every GOP poll this month and is regularly being attacked as "Obama Lite".
A recent Gallup poll, however, indicates that the ground has shifted AGAINST Obama's Big Government philosophy:
The problem, though, is that the American people are not seeing any new flexibility from the President or the Senate Democrats to seriously engage the GOP House in compromise: the President's jobs bill is simply Stimulus v. 2.0 Lite. He's still pushing class warfare politics, he's now gone from doubling unemployment compensation period to proposing 3 years; he's gone from a 2-point decease in cutting payroll taxes (which fund entitlements, thus worsening the liabilities issue) to suggesting an extension to a 3-point decrease. Did he back his own bipartisan deficit reduction commission suggestions? No. His last budget got unanimously voted down in the Democrat-controlled Senate. The Democratic-controlled Senate hasn't even passed a recent budget. Unpopular health care legislation was passed without a single GOP vote and has been found unconstitutional by multiple courts.
I do not think that 2012 voters are going to take out their frustrations on the GOP because the President and Democratic-controlled Senate were locking in their tax, spend, and regulate agenda from the 111th Congress. This is not merely wishful thinking: I think the Senate Democrats and the President are going to thrown out. Recall Obama is only one of the few Democrat candidates to win the Presidency over the last several decades with a majority vote (53%). He lost the moderates and independents last fall and his ratings have been under 50% for several months. The moderates and independents have seen Obama's attempts to move to the center during a general campaign and turn left after the election: fool me once, shame on me; fool me twice,... I don't see how Obama gets back just to breakeven on jobs and the unemployment rate in 14 months, and I think the control of the Senate will change. Right now many, if not most, believe that North Dakota is a sure pickup for the GOP, and the Republicans also have a solid shot at unseating Bill Nelson of NE, picking up the open seats in New Mexico, Virginia and Wisconsin, and the defending incumbents in Missouri and Montana. I think Ohio, Connecticut, Pennsylvania, Minnesota and Florida are all in play depending on the race at the top of the ballot and the candidates winning the nomination. Many put New York, Delaware and Maryland in the safe Dem category, but I would be intrigued if we saw Giuliani or Pataki, Mike Castle and Bob Ehrlich get into those races. The only race I see the GOP in risk of losing--at this time--is Scott Brown's, but I think even with Elizabeth Warren in the mix, Brown will pull it out, especially if Romney captures the GOP nomination, which seems likely. The electability issue is what won McCain the 2008 nomination; Romney is picking up swing states that Perry does not, he's doing better than Perry in one-on-one matchups with Obama, and Romney is hands down the best debater in the field.
The reason I put emphasis on the Senate is because I think voters will question Obama's ability to work with a Republican-controlled Congress. I don't think the American people want analysis paralysis coming out of next year's election: they want action and accountability.
Some initial ideas for the GOP Presidential candidate next fall:
Coke CEO Attacks Anti-Business US Government: Thumbs UP!
CEO Muhtar Kent is not partisan in his criticism, but it's very clear which party is more consistent with the issues raised by his critique.
First, he basically points out the need for territorial treatment of business income. (Obama has been very clear that he is not happy about companies not paying US (higher) taxes on income overseas until those profits are returned to the US.)
Second, he complains that it is actually easier to do business with a Communist country like the People's Republic of China where Coke is midway to investing $7B over 6 years, despite China accounting for less than 10% of global sales; it is investing another $3B in Russia (that bastion of liberty where Putin recently announced he will take over the Presidency again after serving a term as Prime Minister) over 5 years. How much in North America this year? $1.3B. To put it in simple terms: streamline approvals (cut down the critical path), make it simpler, not more complex to do business, be more competitive in terms of taxes and regulations, provide single point of contacts to get things done. This is obvious to any MBA like myself, but of course we have an anti-business Obama White House.
Third, he wants a more stable political environment and closure over unpredictable (e.g., short-term or expiring) tax and regulatory policies, less divisive (e.g., class warfare) rhetoric, (implied) more pro-growth policies, less government intervention or micromanagement (let business be business), and competition for investment capital. He also wants faster, flexible responses to policy changes by our global competitors (business tax brackets have been sticky, while other countries, even Japan, cut their top business tax rates).
I have repeatedly discussed these concepts, referring to usability concerns. The US government has a Ptolemaic view whereby business and individual taxpayers are expected to give their resources and do what they are told at the convenience of omnipotent bureaucrats whom serve at the center of the universe; we face a Procrustean tax and regulatory system. We need a Copernican-style paradigm shift with government focusing on enabling businesses and individuals to exercise their economic liberty.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Think About Me"
I do believe that man is a rope between animal and superman. But the superman I'm thinking of isn't Nietzsche's. The real superhuman, man or woman, is the person who's rid himself of all prejudices, neuroses, and psychoses, who realizes his full potential as a human being, who acts naturally on the basis of gentleness, compassion, and love, who thinks for himself and refuses to follow the herd. That's the genuine dyed-in-the-wool superman.
Philip José Farmer
Policy Quote of the Day
The impetus for broader social insurance reform comes from the recognition that existing programs have substantial undesirable effects on incentives and therefore on economic performance. Unemployment insurance programs raise unemployment. Retirement pensions induce earlier retirement and depress saving. And health insurance programs increase medical costs. Governments are driven by a desire to reduce the economic waste and poor macroeconomic performance that these disincentives create and to avoid the resulting tax consequences as well as the increased tax cost of the aging population. - Martin Feldstein, "Rethinking Social Insurance"Obama: Last of America's Big Government Presidents?
If you're Obama, you've got to feel fairly good about your chances, given the fact that you just got hit by one of the worst midterm rebukes in American history with House Democrats reduced to their lowest numbers in decades, you have a weak jobless recovery, still millions underwater since you took office (never mind millions joining the labor force), never mind a labor force that requires a million jobs a year just to accommodate population growth in the labor force, you have added, in absolute terms, a record 40% to the national debt, on track to exceeding your predecessor's amount over 2 terms just in one term with the economy being technically in recovery over 2 years now, you've gone below 40% job approval in the daily Gallup poll on multiple occasions and you've just suffered the first Treasury debt downgrade in generations.
Yet if you look at comparative polls, you've won 2 of 4 polls this month against a generic GOP opponent, you've lost only one head-to-head matchup against anybody in the GOP field (Romney), and your most competitive opponent Romney has lost every GOP poll this month and is regularly being attacked as "Obama Lite".
A recent Gallup poll, however, indicates that the ground has shifted AGAINST Obama's Big Government philosophy:
- For the first time, Americans believe most of their tax dollars are wasted by the government (51 cents on the dollar)
- Just under 60% (57%), a record high, believe that the federal government has no credibility on the ability to solve domestic problems (a primary focus of progressive Democrat policies)
- In the last 8 years, the percentage of Americans believing that the federal government has grown too large, too powerful at the expense of individual liberties has gone from under a third to a half (49%).
- We have record 80% disapproval of Congress, nearly 70% of no confidence in Congress, and just over a half of those polled have little or no confidence in current or prospective elected officials
The problem, though, is that the American people are not seeing any new flexibility from the President or the Senate Democrats to seriously engage the GOP House in compromise: the President's jobs bill is simply Stimulus v. 2.0 Lite. He's still pushing class warfare politics, he's now gone from doubling unemployment compensation period to proposing 3 years; he's gone from a 2-point decease in cutting payroll taxes (which fund entitlements, thus worsening the liabilities issue) to suggesting an extension to a 3-point decrease. Did he back his own bipartisan deficit reduction commission suggestions? No. His last budget got unanimously voted down in the Democrat-controlled Senate. The Democratic-controlled Senate hasn't even passed a recent budget. Unpopular health care legislation was passed without a single GOP vote and has been found unconstitutional by multiple courts.
I do not think that 2012 voters are going to take out their frustrations on the GOP because the President and Democratic-controlled Senate were locking in their tax, spend, and regulate agenda from the 111th Congress. This is not merely wishful thinking: I think the Senate Democrats and the President are going to thrown out. Recall Obama is only one of the few Democrat candidates to win the Presidency over the last several decades with a majority vote (53%). He lost the moderates and independents last fall and his ratings have been under 50% for several months. The moderates and independents have seen Obama's attempts to move to the center during a general campaign and turn left after the election: fool me once, shame on me; fool me twice,... I don't see how Obama gets back just to breakeven on jobs and the unemployment rate in 14 months, and I think the control of the Senate will change. Right now many, if not most, believe that North Dakota is a sure pickup for the GOP, and the Republicans also have a solid shot at unseating Bill Nelson of NE, picking up the open seats in New Mexico, Virginia and Wisconsin, and the defending incumbents in Missouri and Montana. I think Ohio, Connecticut, Pennsylvania, Minnesota and Florida are all in play depending on the race at the top of the ballot and the candidates winning the nomination. Many put New York, Delaware and Maryland in the safe Dem category, but I would be intrigued if we saw Giuliani or Pataki, Mike Castle and Bob Ehrlich get into those races. The only race I see the GOP in risk of losing--at this time--is Scott Brown's, but I think even with Elizabeth Warren in the mix, Brown will pull it out, especially if Romney captures the GOP nomination, which seems likely. The electability issue is what won McCain the 2008 nomination; Romney is picking up swing states that Perry does not, he's doing better than Perry in one-on-one matchups with Obama, and Romney is hands down the best debater in the field.
The reason I put emphasis on the Senate is because I think voters will question Obama's ability to work with a Republican-controlled Congress. I don't think the American people want analysis paralysis coming out of next year's election: they want action and accountability.
Some initial ideas for the GOP Presidential candidate next fall:
- focus on economic instability, riots, massive deficits and austerity measures in Europe and point out that Obama's political goals have been consistent with the unsustainable policies of European social democrats; Europe is now facing its days of reckoning for overpromising, just as Obama has been doing
- question Obama's long list of broken promises (where do we start: Gitmo, the stimulus bill, the Bush tax cuts, etc.), his legislative priorities, his leadership and decision-making style, and his provocative foreign policy
- promise making America a good place to do business in with competitive, lower, simpler tax rates and regulatory burden, lower the government footprint and simplify points of contact
- cut spending across the board and the deficits, eliminate duplication and waste in government spending
- deliver on bipartisanship, not just talk about it
- fix entitlement programs, outsource and/or delegate government functionality to the states
- streamline government operations. Among the first federal employees to be laid off: IRS agents, six-figure managers and staffers, and pencil-pushing bureaucrats
Coke CEO Attacks Anti-Business US Government: Thumbs UP!
CEO Muhtar Kent is not partisan in his criticism, but it's very clear which party is more consistent with the issues raised by his critique.
First, he basically points out the need for territorial treatment of business income. (Obama has been very clear that he is not happy about companies not paying US (higher) taxes on income overseas until those profits are returned to the US.)
Second, he complains that it is actually easier to do business with a Communist country like the People's Republic of China where Coke is midway to investing $7B over 6 years, despite China accounting for less than 10% of global sales; it is investing another $3B in Russia (that bastion of liberty where Putin recently announced he will take over the Presidency again after serving a term as Prime Minister) over 5 years. How much in North America this year? $1.3B. To put it in simple terms: streamline approvals (cut down the critical path), make it simpler, not more complex to do business, be more competitive in terms of taxes and regulations, provide single point of contacts to get things done. This is obvious to any MBA like myself, but of course we have an anti-business Obama White House.
Third, he wants a more stable political environment and closure over unpredictable (e.g., short-term or expiring) tax and regulatory policies, less divisive (e.g., class warfare) rhetoric, (implied) more pro-growth policies, less government intervention or micromanagement (let business be business), and competition for investment capital. He also wants faster, flexible responses to policy changes by our global competitors (business tax brackets have been sticky, while other countries, even Japan, cut their top business tax rates).
I have repeatedly discussed these concepts, referring to usability concerns. The US government has a Ptolemaic view whereby business and individual taxpayers are expected to give their resources and do what they are told at the convenience of omnipotent bureaucrats whom serve at the center of the universe; we face a Procrustean tax and regulatory system. We need a Copernican-style paradigm shift with government focusing on enabling businesses and individuals to exercise their economic liberty.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Think About Me"
Monday, September 26, 2011
Miscellany: 9/26/11
Quote of the Day
I cannot imagine a God who rewards and punishes the objects of his creation and is but a reflection of human frailty.
Albert Einstein
The Florida Straw Poll and Political Reality
Saturday's straw poll, promoted by Governor Scott and where a string of certain past winners (Reagan, GHW Bush, and Dole) went on to win the nomination, was won by Cain with 37%, followed by the national front runners Rick Perry at 15%, Romney at 14%, Santorum at 11%, and Paul at 10%.
I haven't been following the straw polls so much. For one thing, straw polls are much like website polls: there's a lot of self-selection, meaning that it is a poor substitute for a random poll. Self-selected polls can be manipulated simply by motivating a higher turnout of targeted motivated voters. We earlier saw Bachmann grab the neighboring Iowa straw poll, and a week earlier Ron Paul won the California straw poll with 45% of the vote, with Rick Perry getting 29%, and all other candidates in single digit percentages. Until this past February, Herman Cain had a popular talk show on an Atlanta radio station and is a past US Senate GOP candidate for Georgia, which borders Florida from the north.
It would seem like Cain is surging; today comedian/talk show host Dennis Miller endorsed Cain for President. That and $5 will get you a cup of coffee at Starbuck's. Herman Cain has no government executive experience nor policy expertise (e.g., defense, etc.); he has had embarrassing gaffes, e.g., being stumped by the Palestinian right to return question. I heard him on a recent media interview dodging questions over which economists are behind his 9-9-9 tax plan. I am not a politician, and I remember the Palestinian right of return being covered in Weekly Reader when I was in elementary school; I cannot begin to understand a foreign policy that doesn't start with a thorough understanding of our special allies, Israel and Great Britain. There's no way Herman Cain matches up against a sophistic progressive like Barack Obama: I cringed at McCain's and Palin's debate performances in 2008; I thought they were competitive, but there were things that were awful--Palin letting key questions go unanswered, even ignoring what a moderator had to say. McCain came in with the most predictable assertion in the world--he is constantly bragging about never having asked for an earmark. Obama came back with essentially, look, I called for an end to earmarks months ago, plus, they only account for a couple of pennies on the federal dollar. McCain's handlers had to know Obama would say that. Plus, when you come in with innovative policy ideas like the 9-9-9 plan, Cain has a higher burden because he's attacking the status quo. Obama has an easy job; all he has to do is exploit people's fear of change.
According to the RealClearPolitics polls averages this month, Perry has 28% to Romney's 21.5%, while Paul is at 7.7%, Bachmann has 7.5%, Gingrich 6.8% and Cain 5.5%. Perry has swept all recent polls, but he has not done well at the debates.
Let's face the fact: Romney will win the nomination. There are several reasons, but let's point out even the Democrats recognize this, running a well-publicized web ad mocking Romney's recent visit with Trump. Intrade odds show Romney with just under a 20 point lead. More importantly, Romney has shown surprising spunk when being heckled by progressives, and he has had strong debate performances. GOP voters this spring are not going to gamble on a candidate they feel won't match up well against Obama during the Presidential debate. They also want a candidate whom has appeal in swing states. Romney has even suggested that Sarah Palin join the race; this is a rather transparent move given the fact that over 70% GOP primary voters know she is unelectable and don't want to see her in the race, but the real motivation is a divide-and-conquer strategy over Rick Perry, since the two of them appeal to a similar base. But let's face the facts: Rick Perry had to know last week he was going to get questions on Gardasil and immigration. He should have had focus group-approved talking point responses. Can you imagine if Perry didn't have good responses to predictable questions or statements, he can handle what I know is going to happen during the debates, which Obama will try to swerve or blindside his opponents and the only candidate in this field that I see as least predictable and with intellectual bandwidth to hold his own and return the ball harder than Obama hits it to him is Romney.
I realize that there are people whom will disagree with my assessment (e.g., Kyle-Anne Shiver). I will simply respond to some of the typical points made:
Taxes, Taxes, Taxes
I was annoyed by a Fox News business show Saturday morning; some African-American economist from the liberal Economic Policy Institute was arguing that American businesses had one of the lowest tax burdens in the world. This was deliberately misleading. A PWC study released last April showed that US companies pay the sixth highest effective tax burden (Japan, Morocco, Italy, Indonesia and Germany had higher): 27.7% vs. 19.5% (non-US). Part of what's going on is the companies that are taxed differently on operations outside the US (quite often today, LOWER than uncompetitive US tax rates) are allowed to defer paying taxes on income earned overseas AT THE TOP US TAX RATE until the income comes home. So say country XXX has a tax rate of 20%; presumably the company will get a tax credit for the foreign income tax paid if and when they in-source their profits. The companies have very little incentive to bring those profits back, say to invest in American plant expansions and workers, since the company would immediately owe the US 15% on any money they bring home. Critics will argue that the US has enhanced credits and deductions which mean less income is subject to the higher rate. Others suggest that the tax burden by business is lower elsewhere because most economies have a VAT tax.
Another study released by KPMG last year showed that among 10 countries surveyed (including NAFTA, British Commonwealth, European countries and Japan), the US effective business tax rate worsened from #5 to #6.
Finally, a few comments about tax policies in the context of the Buffett tax/rule. Keep in mind we have tax policies that tax the same stream of income twice. Let's assume for simplicity it's 27.7% (dividends or capital gains at the corporate rate). When Buffett reports his income, he pays another rate on that income. Even if it's 15%, it's really double-taxing the same income. The real tax rate is more like 42.7% (plus whatever state and/or local taxes on the same income).
Furthermore, I recently referenced an ASI study showing only a small portion of capital gains are realized within the first couple of years. Our current system has been taxing income and capital gains on a nominal not real (i.e., inflation-adjusted basis). For example, suppose inflation rose 3% last year on your savings and you earned 5% on your savings. The government is not taxing your 2% net gain--it's taxing your nominal 5%, something that is grossly unfair and confiscatory.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Sara". This is the most hauntingly beautifully arranged Fleetwood Mac song (I also particularly like the musical craftsmanship behind "Gypsy", upcoming). I have been extensively commenting on prior Nicks' compositions, and I will give my take (which no doubt would amuse Nicks greatly, if she ever read what I write about her songs) on this one. I should note that Nicks claims that the original song was at least 2 or 3 times longer with several unreleased verses. Obviously my interpretation is based on the actual lyrics I've heard, and I have to trust that the final verses are representative of the original song.
Please note: I do not know whether any of the below allegations of Nicks' personal life are accurate. Don Henley, a principal singer/songwriter for the Eagles, and Stevie Nicks had a 2-year relationship starting in 1976. There are rumors that Stevie Nicks had an affair with Mick Fleetwood, at the time married to Jenny Boyd, in early 1978. At some later point, Stevie's best friend Sara Recor, a model married to a music manager, started dating Fleetwood, believing that the Nicks-Fleetwood affair had run its course. Fleetwood and Recor divorced their spouses and married each other.
Stevie Nicks was earlier commissioned, around the time of the Henley relationship, by Waylon Jennings, then married to Jessi Colter, to write the song "Leather and Lace". The Jennings marriage soon broke down. Nicks and Henley had sung an early demo of the song together, and they would eventually release their huge hit duet in late 1981. Other hints from Nicks' interviews: the house being built was Henley's, and the "great dark wing" was Mick Fleetwood.
I think all of these come together to explain the song: I think Nicks is moving on from her relationship with Fleetwood. I find the song title 'Sara' enigmatic, because the song is obviously directed mostly at Henley. Only two lines of one verse reference Sara; the only reason to reassure Sara involves the love triangle (particularly a best friend whom may not have double-checked before starting to date the other's former boyfriend). The very first line of the song ("Wait a minute, baby") "Baby" is a term of endearment for one's significant other. There are two men referenced in the song, one of whom no longer has a relationship with Nicks ("now it's gone"). Nicks, in fact, uses "my match" (i.e., a well-suited couple, eligible for marriage) and says he is a singer (definitely not Fleetwood). Notice the unusual crafting of the verses: she starts with Fleetwood, ends with Henley; she starts with Sara, ends with Henley; she starts by saying the affair is over, ends with Henley. 'Call me', 'ask me': I'll meet you anytime, any place. (I'm not sure about some of the verses: maybe during their past relationship, Nicks liked to go out partying more than Henley.)
Why name the song 'Sara'? I think Nicks is unsure of Henley's feelings and needs the support of her best friend as she moves on with her life. Why does Nicks sing of Henley in the third person at one point, but second person elsewhere? I think she's saying "I know the guy I really wanted to be with was not Fleetwood but this musician I worked with on this project..."
"I had met my match/he was singing" clearly references Henley's professional collaboration (Fleetwood is not a vocalist); "Undoing the laces" is an unmistakable reference to the song Nicks wrote and Henley collaborated with her on and also suggests the intimate nature of their relationship.
"Sara, you're the poet in my heart, never change, never stop": Sara, I love you; you are my rock, my best friend forever; whatever feelings I had for Fleetwood are over; I don't blame you for what happened with Fleetwood.
'light', 'fire' (sun), 'drowning', 'wing': maybe I'm reading too much into the verbiage here, but what immediately comes to mind is the story of Daedalus and Icarus from Greek mythology. (Remember the Kansas classic hit, "Carry On Wayward Son"?) Daedalus designs wings for him and his son Icarus to escape from the island of Crete; Daedalus warns his son against flying too close to the sun for fear it would melt the wax binding the feathers to the wings. The son forgot or ignored his father's warning, the wing structures were compromised, with Icarus falling to the sea and drowning. Nicks is Icarus.
"said you'd give me light": Henley gave Nicks advice or a warning about mixing personal/professional relationships (e.g., Fleetwood?) "But you never told me about the fire" Perhaps Nicks was convinced that her relationship with Fleetwood could be discreet and contained, that it wouldn't affect her other relationships, especially her connection with Sara. But the Nicks-Fleetwood relationship tested her bonds with others in unexpected ways.
"Drowning in the sea of love": I think Nicks sees herself as Icarus: the reality of the Fleetwood relationship, the "fire", has affected her relationships with others. She finds herself in uncharted waters, no longer sure how others feel about her, although she is sure of how she feels about Sara and Henley. I think I've seen locus of control crop up in other Nicks' songs (e.g., "Landslide") as well.
"Now it's gone": the relationship with Fleetwood is over; never mind the details; I don't want to talk about it; it doesn't matter.
"All I ever wanted was to know you were still dreaming": Henley, I hope that I'm still in your thoughts, that you still have feelings for me.
"It's a heartbeat, and it never really died": Henley, I never really stopped loving you; it's been there all the time. I'm ready to move on with my life; let me know when you're ready for the renewal of our relationship, and I'll be there.
I suspect if Stevie Nicks ever read this analysis, she would be rolling on the ground laughing at poor pitiful clueless me. Indeed, given my never having found my own true love, who am I to write about the topic? I think, though, those of us love-challenged people tend to be a little idealistic.
I cannot imagine a God who rewards and punishes the objects of his creation and is but a reflection of human frailty.
Albert Einstein
The Florida Straw Poll and Political Reality
Saturday's straw poll, promoted by Governor Scott and where a string of certain past winners (Reagan, GHW Bush, and Dole) went on to win the nomination, was won by Cain with 37%, followed by the national front runners Rick Perry at 15%, Romney at 14%, Santorum at 11%, and Paul at 10%.
I haven't been following the straw polls so much. For one thing, straw polls are much like website polls: there's a lot of self-selection, meaning that it is a poor substitute for a random poll. Self-selected polls can be manipulated simply by motivating a higher turnout of targeted motivated voters. We earlier saw Bachmann grab the neighboring Iowa straw poll, and a week earlier Ron Paul won the California straw poll with 45% of the vote, with Rick Perry getting 29%, and all other candidates in single digit percentages. Until this past February, Herman Cain had a popular talk show on an Atlanta radio station and is a past US Senate GOP candidate for Georgia, which borders Florida from the north.
It would seem like Cain is surging; today comedian/talk show host Dennis Miller endorsed Cain for President. That and $5 will get you a cup of coffee at Starbuck's. Herman Cain has no government executive experience nor policy expertise (e.g., defense, etc.); he has had embarrassing gaffes, e.g., being stumped by the Palestinian right to return question. I heard him on a recent media interview dodging questions over which economists are behind his 9-9-9 tax plan. I am not a politician, and I remember the Palestinian right of return being covered in Weekly Reader when I was in elementary school; I cannot begin to understand a foreign policy that doesn't start with a thorough understanding of our special allies, Israel and Great Britain. There's no way Herman Cain matches up against a sophistic progressive like Barack Obama: I cringed at McCain's and Palin's debate performances in 2008; I thought they were competitive, but there were things that were awful--Palin letting key questions go unanswered, even ignoring what a moderator had to say. McCain came in with the most predictable assertion in the world--he is constantly bragging about never having asked for an earmark. Obama came back with essentially, look, I called for an end to earmarks months ago, plus, they only account for a couple of pennies on the federal dollar. McCain's handlers had to know Obama would say that. Plus, when you come in with innovative policy ideas like the 9-9-9 plan, Cain has a higher burden because he's attacking the status quo. Obama has an easy job; all he has to do is exploit people's fear of change.
According to the RealClearPolitics polls averages this month, Perry has 28% to Romney's 21.5%, while Paul is at 7.7%, Bachmann has 7.5%, Gingrich 6.8% and Cain 5.5%. Perry has swept all recent polls, but he has not done well at the debates.
Let's face the fact: Romney will win the nomination. There are several reasons, but let's point out even the Democrats recognize this, running a well-publicized web ad mocking Romney's recent visit with Trump. Intrade odds show Romney with just under a 20 point lead. More importantly, Romney has shown surprising spunk when being heckled by progressives, and he has had strong debate performances. GOP voters this spring are not going to gamble on a candidate they feel won't match up well against Obama during the Presidential debate. They also want a candidate whom has appeal in swing states. Romney has even suggested that Sarah Palin join the race; this is a rather transparent move given the fact that over 70% GOP primary voters know she is unelectable and don't want to see her in the race, but the real motivation is a divide-and-conquer strategy over Rick Perry, since the two of them appeal to a similar base. But let's face the facts: Rick Perry had to know last week he was going to get questions on Gardasil and immigration. He should have had focus group-approved talking point responses. Can you imagine if Perry didn't have good responses to predictable questions or statements, he can handle what I know is going to happen during the debates, which Obama will try to swerve or blindside his opponents and the only candidate in this field that I see as least predictable and with intellectual bandwidth to hold his own and return the ball harder than Obama hits it to him is Romney.
I realize that there are people whom will disagree with my assessment (e.g., Kyle-Anne Shiver). I will simply respond to some of the typical points made:
- "Look at what Romney did in Massachusetts vs. what Perry did in Texas--and the fact of RomneyCare." (not a quote but restatement) First of all, the question of RomneyCare: there was a far worse ballot initiative likely to carry, and the state had been threatened with a huge Medicaid contribution cutoff. Romney did not run on RomneyCare; it arose AFTER his election. When he went about his grand bargain with the Democratic legislature, he didn't want a reworked HillaryCare model, he did not want to implement (as did the Massachusetts House) a payroll tax. He wanted people to buy through a private-sector, not public-sector provider. Romney vetoed several points in RomneyCare and was overridden by a legislature overwhelmingly controlled by liberal Democrats. Second, a governor is not the legislature; he's got the power of the veto, but the idea that Romney is going to ram medical malpractice tort reform in a state like Massachusetts is just an unrealistic expectation. The idea that Romney was inspiration for legislation written by a liberal Democratic legislature is patently absurd. Perry has been governor of a state that only became reliably Republican after George W. Bush became governor in 1995. Perry also started his career as a Democrat and backed Gore's 1988 Presidential bid.
- "Romney flip-flopped on major issues during his last 2 years as governor as he prepared to run for President." First of all, Romney has been focusing on economic issues, not cultural issues, and those positions have been consistent. Second, the cultural issues being discussed--not really pertinent to the President, whom has very little control over cultural issues--are NUANCED changes, not SUBSTANTIVE changes. For example, let's take the issue of abortion: Kennedy during his reelection campaign against Romney in the 1990's argued that Romney had flip-flopped from the other direction to a pro-abortion choice. Romney argued, just like a number of prominent Catholic politicians, e.g., Mario Cuomo, that he was personally opposed abortion but not willing to impose his position on others. Romney decided around midway through his term that this position was morally incoherent and hence unsustainable.
Taxes, Taxes, Taxes
I was annoyed by a Fox News business show Saturday morning; some African-American economist from the liberal Economic Policy Institute was arguing that American businesses had one of the lowest tax burdens in the world. This was deliberately misleading. A PWC study released last April showed that US companies pay the sixth highest effective tax burden (Japan, Morocco, Italy, Indonesia and Germany had higher): 27.7% vs. 19.5% (non-US). Part of what's going on is the companies that are taxed differently on operations outside the US (quite often today, LOWER than uncompetitive US tax rates) are allowed to defer paying taxes on income earned overseas AT THE TOP US TAX RATE until the income comes home. So say country XXX has a tax rate of 20%; presumably the company will get a tax credit for the foreign income tax paid if and when they in-source their profits. The companies have very little incentive to bring those profits back, say to invest in American plant expansions and workers, since the company would immediately owe the US 15% on any money they bring home. Critics will argue that the US has enhanced credits and deductions which mean less income is subject to the higher rate. Others suggest that the tax burden by business is lower elsewhere because most economies have a VAT tax.
Another study released by KPMG last year showed that among 10 countries surveyed (including NAFTA, British Commonwealth, European countries and Japan), the US effective business tax rate worsened from #5 to #6.
Finally, a few comments about tax policies in the context of the Buffett tax/rule. Keep in mind we have tax policies that tax the same stream of income twice. Let's assume for simplicity it's 27.7% (dividends or capital gains at the corporate rate). When Buffett reports his income, he pays another rate on that income. Even if it's 15%, it's really double-taxing the same income. The real tax rate is more like 42.7% (plus whatever state and/or local taxes on the same income).
Furthermore, I recently referenced an ASI study showing only a small portion of capital gains are realized within the first couple of years. Our current system has been taxing income and capital gains on a nominal not real (i.e., inflation-adjusted basis). For example, suppose inflation rose 3% last year on your savings and you earned 5% on your savings. The government is not taxing your 2% net gain--it's taxing your nominal 5%, something that is grossly unfair and confiscatory.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Sara". This is the most hauntingly beautifully arranged Fleetwood Mac song (I also particularly like the musical craftsmanship behind "Gypsy", upcoming). I have been extensively commenting on prior Nicks' compositions, and I will give my take (which no doubt would amuse Nicks greatly, if she ever read what I write about her songs) on this one. I should note that Nicks claims that the original song was at least 2 or 3 times longer with several unreleased verses. Obviously my interpretation is based on the actual lyrics I've heard, and I have to trust that the final verses are representative of the original song.
Please note: I do not know whether any of the below allegations of Nicks' personal life are accurate. Don Henley, a principal singer/songwriter for the Eagles, and Stevie Nicks had a 2-year relationship starting in 1976. There are rumors that Stevie Nicks had an affair with Mick Fleetwood, at the time married to Jenny Boyd, in early 1978. At some later point, Stevie's best friend Sara Recor, a model married to a music manager, started dating Fleetwood, believing that the Nicks-Fleetwood affair had run its course. Fleetwood and Recor divorced their spouses and married each other.
Stevie Nicks was earlier commissioned, around the time of the Henley relationship, by Waylon Jennings, then married to Jessi Colter, to write the song "Leather and Lace". The Jennings marriage soon broke down. Nicks and Henley had sung an early demo of the song together, and they would eventually release their huge hit duet in late 1981. Other hints from Nicks' interviews: the house being built was Henley's, and the "great dark wing" was Mick Fleetwood.
I think all of these come together to explain the song: I think Nicks is moving on from her relationship with Fleetwood. I find the song title 'Sara' enigmatic, because the song is obviously directed mostly at Henley. Only two lines of one verse reference Sara; the only reason to reassure Sara involves the love triangle (particularly a best friend whom may not have double-checked before starting to date the other's former boyfriend). The very first line of the song ("Wait a minute, baby") "Baby" is a term of endearment for one's significant other. There are two men referenced in the song, one of whom no longer has a relationship with Nicks ("now it's gone"). Nicks, in fact, uses "my match" (i.e., a well-suited couple, eligible for marriage) and says he is a singer (definitely not Fleetwood). Notice the unusual crafting of the verses: she starts with Fleetwood, ends with Henley; she starts with Sara, ends with Henley; she starts by saying the affair is over, ends with Henley. 'Call me', 'ask me': I'll meet you anytime, any place. (I'm not sure about some of the verses: maybe during their past relationship, Nicks liked to go out partying more than Henley.)
Why name the song 'Sara'? I think Nicks is unsure of Henley's feelings and needs the support of her best friend as she moves on with her life. Why does Nicks sing of Henley in the third person at one point, but second person elsewhere? I think she's saying "I know the guy I really wanted to be with was not Fleetwood but this musician I worked with on this project..."
"I had met my match/he was singing" clearly references Henley's professional collaboration (Fleetwood is not a vocalist); "Undoing the laces" is an unmistakable reference to the song Nicks wrote and Henley collaborated with her on and also suggests the intimate nature of their relationship.
"Sara, you're the poet in my heart, never change, never stop": Sara, I love you; you are my rock, my best friend forever; whatever feelings I had for Fleetwood are over; I don't blame you for what happened with Fleetwood.
'light', 'fire' (sun), 'drowning', 'wing': maybe I'm reading too much into the verbiage here, but what immediately comes to mind is the story of Daedalus and Icarus from Greek mythology. (Remember the Kansas classic hit, "Carry On Wayward Son"?) Daedalus designs wings for him and his son Icarus to escape from the island of Crete; Daedalus warns his son against flying too close to the sun for fear it would melt the wax binding the feathers to the wings. The son forgot or ignored his father's warning, the wing structures were compromised, with Icarus falling to the sea and drowning. Nicks is Icarus.
"said you'd give me light": Henley gave Nicks advice or a warning about mixing personal/professional relationships (e.g., Fleetwood?) "But you never told me about the fire" Perhaps Nicks was convinced that her relationship with Fleetwood could be discreet and contained, that it wouldn't affect her other relationships, especially her connection with Sara. But the Nicks-Fleetwood relationship tested her bonds with others in unexpected ways.
"Drowning in the sea of love": I think Nicks sees herself as Icarus: the reality of the Fleetwood relationship, the "fire", has affected her relationships with others. She finds herself in uncharted waters, no longer sure how others feel about her, although she is sure of how she feels about Sara and Henley. I think I've seen locus of control crop up in other Nicks' songs (e.g., "Landslide") as well.
"Now it's gone": the relationship with Fleetwood is over; never mind the details; I don't want to talk about it; it doesn't matter.
"All I ever wanted was to know you were still dreaming": Henley, I hope that I'm still in your thoughts, that you still have feelings for me.
"It's a heartbeat, and it never really died": Henley, I never really stopped loving you; it's been there all the time. I'm ready to move on with my life; let me know when you're ready for the renewal of our relationship, and I'll be there.
I suspect if Stevie Nicks ever read this analysis, she would be rolling on the ground laughing at poor pitiful clueless me. Indeed, given my never having found my own true love, who am I to write about the topic? I think, though, those of us love-challenged people tend to be a little idealistic.
Sunday, September 25, 2011
Miscellany: 9/25/11
Quote of the Day
In matters of style, swim with the current; in matters of principle, stand like a rock.
Thomas Jefferson
Education, Talking Points and Some Thoughts
This past week I've tried to think of a proper vehicle to flesh out my latest thoughts on education, reform and a right fit federal response: this has been motivated by a number of factors. Barack Obama is currently focused on the topic; the issue arose with respect to whether to abolish the Department of Education at the recent Florida GOP Presidential debate; and there was a roundtable discussion at the end of today's Meet the Press.
Talking Points. First of all, I want to address some pet peeve talking points, including one by one of my favorite fellow conservatives and former Reagan Education Department Secretary William Bennett. (He has over the past several years compiled some excellent anthologies (e.g., The Book of Virtues and The Moral Compass: in fact I have given copies of one or more volumes to my goddaughters.) But the last thing I want to hear committed education reformers (including one of my favorites, Michelle Rhee) talking about is paying public sector teachers more (in some cases, six-figures). I'm tired of trite talking points and anecdotes about teachers paying for school supplies out of their own pockets. That's a management issue: at the core of many of these problems are dysfunctional, corrupt collective bargaining agreements with self-promoting teacher unions which tie the hands of management.
Let me very clear here: I don't think that the government should be competing with the private sector for resources--particularly, apples and oranges comparisons with other professions, which we saw during the Wisconsin protests over long-overdue collective bargaining reforms earlier this year. Public sector and/or teacher unions don't want to compare their compensation packages with private sector school teachers (e.g., Catholic schools). Nobody seriously disputes the comparable quality of Catholic schools and their teachers, but Catholic school teachers make considerably less; I've attended both public and Catholic schools, at the elementary/middle-school and university levels. The teachers I had at the private level were just as good, if not better than any public sector teacher I've ever met. I have an uncle, a retired pastor, whom operated schools in at least some of his parishes; contrary to anti-Catholic propaganda, most Catholic parishes have limited resources; Catholic schools are not profitable; they reflect one of the missions of the Church. I am not aware of students turned down based on limited family resources (e.g., large families). Yet, for example, when NJ Governor Chris Christie sends his kids to Catholic school despite paying an ungodly amount of property taxes, he is spending additional money to do so; certainly he would not be doing so to send his children to an educationally inferior school.
I can honestly say that I never once considered salaries during the time I earned my graduate business degrees. I knew professors made a comfortable living, better than I was making as a teaching fellow (a few hundred dollars a month) for teaching a couple of classes a semester. But, for example, I knew before I went on a campus visit (expense-paid job interview) to a well-known Catholic college in Rhode Island, the position would not pay more than $35K a year, significantly below what I was being offered at any state university--hence, even less than some offers my students were getting. (I knew they had a general preference for local candidates, and they ended up making an offer to one of them.) I am used to the fact that many people with a fraction of my abilities, skills, knowledge and accomplishments make more money. The fact is that I loved being a college professor, and I was a very good one.
The average teacher makes more than $40K, and when you factor in other factors like a much shorter work year, higher job security and modest, if any, contributions for high-cost benefits like retirement and health care insurance: most people think of these as "free" but often they account for up to 40% of total compensation, multiple times more generous than in the private sector. We know, for instance, investing in low-risk fixed instruments (say, money market or CD's) are low-yielding, say, than common stocks with volatile prices but potentially, likely higher returns. It used to be that the relatively lower-paying compensation was one of the trade-offs or sacrifices you made to serve your fellow citizens, whom are also your real employers.
Now what is legitimate for Bill Bennett to raise in terms of teacher compensation is the rigged labor market in public education (particularly K-12), a dysfunctional artifact of publicly-protected labor monopolies, intrinsically against taxpayer interests in frugal management of collected taxes; as we have come to expect, the self-centered unions feel entitled to unsustainable bloated compensation packages and inefficient work rules: they arrogantly, unjustifiably assert that it's NOT that teachers make too much--it's that taxpayers (particularly, higher-income ones) pay too little. Whenever you see companies or schools swamped with resumes (or vitae in the academic market) and/or wait lists for particular positions (I haven't checked, but I'm going to speculate there are robust supplies of elementary education, English and political science/history teachers) versus others (e.g., math and the hard sciences), it's clear that compensation packages are overly generous for the former and insufficient for the latter. Moreover, I would be willing to conjecture that increases in teacher compensation are related more to factors like longevity and advanced education degree, at best weakly correlated with teacher performance. And teachers strenuously argue against each and every OBJECTIVE assessment of their students' performance. In the private sector, these considerations are far less of a factor. It is easier to fire or layoff mediocre performers, regardless of tenure, and to promote or compensate based on merit; e.g., rapidly rising salesmen or high tech managers.
That leads to my second point of discussion--the feeble-minded, trite objection that 'teachers will teach to the test'; we have long known about the Hawthorne effect. Can it happen within a student standardized testing context? Of course; but I see that more of a reflection on standardized test design and validation, and teacher competence and performance evaluation. If we take, for instance, Bloom's taxonomy on educational objectives, teachers need to address higher-order skills and abilities. If a math teacher just teaches how to solve equations, but not to infer the relevant relationship within the context of a word problem, he is failing to adequately address and/or evaluate those higher-order behaviors. (Believe me, when I was a teaching assistant at the University of Texas leading lab sections on calculus word problems, I sensed the frustrations of freshmen at 8AM in dealing with those problems, never mind having to see my face at that hour of the morning. The female graduate assistant in the other section may have had to write out the answers using the solution book, but she was easier on the eyes. I found out when I asked a couple of male students in my section why they weren't showing up.) A competent, confident teacher knows his or her students are properly prepared and know any reliable, valid measure will reflect their performance; you should not be able to game a properly constructed standardized test. The results should parallel those for the teacher's own tests, which should be reviewed, and other measures of student learning.
The problem with those incompetent people raising the objection of testing to the test is that other teachers are subject to the same use of standardized tests, and they provide baselines for assessing student and teacher base and incremental performance. Multiple tests increase the confidence in the assessment of student performance (vs. an outlier performance).
A third pet peeve involves pathetic, predictable, polemical attacks by people like PBS commentator Tavis Smiley, trying to argue that teachers are being scapegoated for problems beyond their control and the impact of adversarial conditions (i.e., the Wisconsin collective bargaining reform). Cry me a river: in the real world, if companies face slumping sales of their widgets for economic or competitive reasons, they have to cut costs, including personnel. Attrition rates among teachers are modest compared to other professions, and seniority rules protect older, more expensive teachers, independent of performance, even when tax revenues are hammered by economic conditions. The idea that teachers are more equal than the parents of schoolchildren is clearly indefensible.
Miscellaneous Observations.
The Role of Federal Policy and A Suggestion. Given the fact, as Mitt Romney points out, that education is delivered on a local or state basis, how do you make a case for education as a federal responsibility? Certainly not in micromanaging local and state schools, particularly educational success stories. Perhaps I can see a repository of a national education outcome database, a minimal core curriculum, transferable educational credentials, and related considerations. We need to consider taking action against abusive anti-competitive practices of public sector labor monopolies. But I dislike the federal government exerting (with unpaid mandates) control over local and state responsibilities.
If there was a federal role, it would be to focus resources in taking over "bankrupt" chronically failed urban or rural schools on a shared revenue basis (i.e., firing management, canceling unsustainable labor contracts, and terminating lower-performing teachers, regardless of tenure) and/or extend its efforts with private sector partners (including charter or religious school partners, provided no religious content in core curricula). The schools, once properly back on their feet, would be transitioned back to state or local control (or private sector partners).
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Tusk"
In matters of style, swim with the current; in matters of principle, stand like a rock.
Thomas Jefferson
Education, Talking Points and Some Thoughts
This past week I've tried to think of a proper vehicle to flesh out my latest thoughts on education, reform and a right fit federal response: this has been motivated by a number of factors. Barack Obama is currently focused on the topic; the issue arose with respect to whether to abolish the Department of Education at the recent Florida GOP Presidential debate; and there was a roundtable discussion at the end of today's Meet the Press.
Talking Points. First of all, I want to address some pet peeve talking points, including one by one of my favorite fellow conservatives and former Reagan Education Department Secretary William Bennett. (He has over the past several years compiled some excellent anthologies (e.g., The Book of Virtues and The Moral Compass: in fact I have given copies of one or more volumes to my goddaughters.) But the last thing I want to hear committed education reformers (including one of my favorites, Michelle Rhee) talking about is paying public sector teachers more (in some cases, six-figures). I'm tired of trite talking points and anecdotes about teachers paying for school supplies out of their own pockets. That's a management issue: at the core of many of these problems are dysfunctional, corrupt collective bargaining agreements with self-promoting teacher unions which tie the hands of management.
Let me very clear here: I don't think that the government should be competing with the private sector for resources--particularly, apples and oranges comparisons with other professions, which we saw during the Wisconsin protests over long-overdue collective bargaining reforms earlier this year. Public sector and/or teacher unions don't want to compare their compensation packages with private sector school teachers (e.g., Catholic schools). Nobody seriously disputes the comparable quality of Catholic schools and their teachers, but Catholic school teachers make considerably less; I've attended both public and Catholic schools, at the elementary/middle-school and university levels. The teachers I had at the private level were just as good, if not better than any public sector teacher I've ever met. I have an uncle, a retired pastor, whom operated schools in at least some of his parishes; contrary to anti-Catholic propaganda, most Catholic parishes have limited resources; Catholic schools are not profitable; they reflect one of the missions of the Church. I am not aware of students turned down based on limited family resources (e.g., large families). Yet, for example, when NJ Governor Chris Christie sends his kids to Catholic school despite paying an ungodly amount of property taxes, he is spending additional money to do so; certainly he would not be doing so to send his children to an educationally inferior school.
I can honestly say that I never once considered salaries during the time I earned my graduate business degrees. I knew professors made a comfortable living, better than I was making as a teaching fellow (a few hundred dollars a month) for teaching a couple of classes a semester. But, for example, I knew before I went on a campus visit (expense-paid job interview) to a well-known Catholic college in Rhode Island, the position would not pay more than $35K a year, significantly below what I was being offered at any state university--hence, even less than some offers my students were getting. (I knew they had a general preference for local candidates, and they ended up making an offer to one of them.) I am used to the fact that many people with a fraction of my abilities, skills, knowledge and accomplishments make more money. The fact is that I loved being a college professor, and I was a very good one.
The average teacher makes more than $40K, and when you factor in other factors like a much shorter work year, higher job security and modest, if any, contributions for high-cost benefits like retirement and health care insurance: most people think of these as "free" but often they account for up to 40% of total compensation, multiple times more generous than in the private sector. We know, for instance, investing in low-risk fixed instruments (say, money market or CD's) are low-yielding, say, than common stocks with volatile prices but potentially, likely higher returns. It used to be that the relatively lower-paying compensation was one of the trade-offs or sacrifices you made to serve your fellow citizens, whom are also your real employers.
Now what is legitimate for Bill Bennett to raise in terms of teacher compensation is the rigged labor market in public education (particularly K-12), a dysfunctional artifact of publicly-protected labor monopolies, intrinsically against taxpayer interests in frugal management of collected taxes; as we have come to expect, the self-centered unions feel entitled to unsustainable bloated compensation packages and inefficient work rules: they arrogantly, unjustifiably assert that it's NOT that teachers make too much--it's that taxpayers (particularly, higher-income ones) pay too little. Whenever you see companies or schools swamped with resumes (or vitae in the academic market) and/or wait lists for particular positions (I haven't checked, but I'm going to speculate there are robust supplies of elementary education, English and political science/history teachers) versus others (e.g., math and the hard sciences), it's clear that compensation packages are overly generous for the former and insufficient for the latter. Moreover, I would be willing to conjecture that increases in teacher compensation are related more to factors like longevity and advanced education degree, at best weakly correlated with teacher performance. And teachers strenuously argue against each and every OBJECTIVE assessment of their students' performance. In the private sector, these considerations are far less of a factor. It is easier to fire or layoff mediocre performers, regardless of tenure, and to promote or compensate based on merit; e.g., rapidly rising salesmen or high tech managers.
That leads to my second point of discussion--the feeble-minded, trite objection that 'teachers will teach to the test'; we have long known about the Hawthorne effect. Can it happen within a student standardized testing context? Of course; but I see that more of a reflection on standardized test design and validation, and teacher competence and performance evaluation. If we take, for instance, Bloom's taxonomy on educational objectives, teachers need to address higher-order skills and abilities. If a math teacher just teaches how to solve equations, but not to infer the relevant relationship within the context of a word problem, he is failing to adequately address and/or evaluate those higher-order behaviors. (Believe me, when I was a teaching assistant at the University of Texas leading lab sections on calculus word problems, I sensed the frustrations of freshmen at 8AM in dealing with those problems, never mind having to see my face at that hour of the morning. The female graduate assistant in the other section may have had to write out the answers using the solution book, but she was easier on the eyes. I found out when I asked a couple of male students in my section why they weren't showing up.) A competent, confident teacher knows his or her students are properly prepared and know any reliable, valid measure will reflect their performance; you should not be able to game a properly constructed standardized test. The results should parallel those for the teacher's own tests, which should be reviewed, and other measures of student learning.
The problem with those incompetent people raising the objection of testing to the test is that other teachers are subject to the same use of standardized tests, and they provide baselines for assessing student and teacher base and incremental performance. Multiple tests increase the confidence in the assessment of student performance (vs. an outlier performance).
A third pet peeve involves pathetic, predictable, polemical attacks by people like PBS commentator Tavis Smiley, trying to argue that teachers are being scapegoated for problems beyond their control and the impact of adversarial conditions (i.e., the Wisconsin collective bargaining reform). Cry me a river: in the real world, if companies face slumping sales of their widgets for economic or competitive reasons, they have to cut costs, including personnel. Attrition rates among teachers are modest compared to other professions, and seniority rules protect older, more expensive teachers, independent of performance, even when tax revenues are hammered by economic conditions. The idea that teachers are more equal than the parents of schoolchildren is clearly indefensible.
Miscellaneous Observations.
- The teacher unions and/or Big Education establishment will do everything they can maintain or expand funding of education, will argue that standard tests are time-consuming, not realistic and yield garbage data; we need very expensive, questionably reliable qualitative, peer or expert appraisals. Short-answer tests are more efficient, wider scope and more representative, more granular or precise, and reliable in terms of sampling student educational performance.
- There are waiting lists and lotteries to get into charter schools and/or private schools. This is evidence of the lack of competition in a publicly-protected monopoly. Technically the existence of private or charter schools argues against a monopoly, but taxpayers are forced to support the local system so they are a consumer, whether or not they elect to enroll their children.
- There are a number of guidelines (e.g., lower the student-teacher ratio) or novel teaching methods, etc., in an attempt to improve instructional outcomes. Yet does that explain why K-12 student scores in other nations outperform us, without the use of said resources? Many countries' students do better despite relatively fewer teachers. In fact, we know that there are important cultural differences. Asian students, even first-generation immigrant children (including other cultures--Miguel Estrada comes immediately to mind), routinely out-achieve other races/ethnic groups (even Caucasian). I'm convinced it has more to do with a near-obsession of parents with rigorous academic achievement and expectations for their children being the ticket to a comfortable existence (in many countries, the government bureaucracy). I wrote multiple commentaries on the "Tiger Mom" kerfuffle a few months ago. I also want to point out, as I have in other commentaries, the rather obvious point that we are still running off an obsolete agrarian school calendar: the length of the school years is up to 10% longer or more.
The Role of Federal Policy and A Suggestion. Given the fact, as Mitt Romney points out, that education is delivered on a local or state basis, how do you make a case for education as a federal responsibility? Certainly not in micromanaging local and state schools, particularly educational success stories. Perhaps I can see a repository of a national education outcome database, a minimal core curriculum, transferable educational credentials, and related considerations. We need to consider taking action against abusive anti-competitive practices of public sector labor monopolies. But I dislike the federal government exerting (with unpaid mandates) control over local and state responsibilities.
If there was a federal role, it would be to focus resources in taking over "bankrupt" chronically failed urban or rural schools on a shared revenue basis (i.e., firing management, canceling unsustainable labor contracts, and terminating lower-performing teachers, regardless of tenure) and/or extend its efforts with private sector partners (including charter or religious school partners, provided no religious content in core curricula). The schools, once properly back on their feet, would be transitioned back to state or local control (or private sector partners).
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Tusk"
Saturday, September 24, 2011
Miscellany: 9/24/11
Quote of the Day
I only regret that I have but one life to lose for my country.
Nathan Hale
Learning to Pick One's Battles: The FEMA Funding Showdown
Senator Harry Reid has played the demagogue card before; let reprise the conclusion of last year's unemployment compensation filibuster that made former Senator Jim Bunning the most harassed and vilified politician in the mainstream media:
We all know how disingenuous Democrats have been--paying lip service during the last session of Congress to the concept of pay-as-you-go which is how you ended up with 24% increases in funding (not including the one-time spending of the massive 2009 stimulus bill). Yet the Senate approved a $6.9B budget. What about the current fiscal year (2011) ending next Friday? "Congress approved $2.7 billion to FEMA for the Disaster Relief Fund in fiscal year 2011 in addition to $2.8 billion in unused funds from the 2010 fiscal year. Another $1.8 billion in funds that were no longer needed from previous years were also made available to the disaster relief fund in fiscal year 2011." The House approved an increase for FY2011 of $1B, plus $2.7B for FY2012, with part of the budget offset by a reduction in a clean-energy program (no doubt motivated by the ongoing Solyndra scandal).
The Senate rejected (under filibuster rules) two amendments, one by Tom Coburn whom was looking to offset the entire budget by cost savings in eliminating duplicate resources and a second from Rand Paul, looking to offset part of the cost by certain foreign program expenditures (which won only about a third of the votes needed to pass cloture).
Now what's particularly noticeable here is Tom Coburn's amendment focusing on hundreds of billions of duplication in government; it passed 54-45 but failed to reach the 60-vote cloture minimum needed. I finally tracked down the roll call vote on Senate Amendment 610 here; a quick scan shows all 45 No's were Democrats, and the few 'yea' Democrat votes seemed to come from Senators standing for reelection (or expiring terms) next year: Webb (VA), Klobuchar (MN), McCaskill (MO), Nelson (NE), and Manchin (WV).
How would I have voted? Briefly: yea on Coburn; nay on Paul; yea on the $6.9B Senate bill; yea on the House bill. To explain: first of all, I look at the nature and fiscal materiality of the expenditure. I think when you're doing budget offsets, you look to spread the offset across the budget. You certainly don't go after key spending priorities by our Nobel Laureate President, such as foreign expenditures and clean energy; that's like teeing up the ball for Obama to veto it, and with a 15% approval rating, the Congress can't afford to play a game of political posturing which will be seen by the Democrats, not to mention the mainstream media as blatant political opposition, not principled opposition. Second, I don't think you risk a polarizing shutdown over a difference of only a few billion dollars in the context of a $3.7T budget. I know you have to start somewhere, and every dollar counts.
But you don't play a game of political chicken over "Mom, apple pie, and Chevrolet" issues. The Democrats, of course, would love nothing better than for certain ideological Republicans to be scapegoated for voting on the back of those affected by acts of God. Keep it simple, stupid! I want to see across-the-board cuts, which will be much more politically risky for Obama to oppose, because it is spread across everyone's pet programs and thus cannot be seen as partisan. Personally, I don't mind there's ANY cut Obama would stomach.
But I agree with fellow fiscal hawks like Senators Rubio, Vitter, and Toomey whom were among the double-digit GOP Senator voters in support of the $6.9B bill. I would argue to my fellow Tea Party supporters that we can't afford to be penny-wise, dollar-foolish (pound-foolish). We can't afford to throw away Senate seats like we did last year in Colorado, Nevada, and Delaware. The big battle is for material, big-dollar budgetary reforms. Have people forgotten how easily Paul Ryan's Medicare plan was disingenuously attacked by a political opportunist Democrat in capturing a GOP House seat earlier this year , vacant because of a resignation over a mild sex scandal. This was just one year after the Democrats made Medicare cuts a key funding source for ObamaCare. I suggest each GOP Congressman and Senator remember the famous Serenity Prayer:
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.
- Reinhold Niebuhr
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Don't Stop"
I only regret that I have but one life to lose for my country.
Nathan Hale
Learning to Pick One's Battles: The FEMA Funding Showdown
Senator Harry Reid has played the demagogue card before; let reprise the conclusion of last year's unemployment compensation filibuster that made former Senator Jim Bunning the most harassed and vilified politician in the mainstream media:
The unemployment extension, which also included COBRA subsidies, authorization for higher pay for Medicare doctors and funding for federal highway programs, passed 78-19. Under the deal with Bunning, Reid agreed to allow a vote on a measure to offset the bill's $10 billion cost with cuts in other programs. However, the off-set measure is expected to fail, and the unemployment extension bill will not be paid for after all.How many times at the drop of a hat do we hear about ANY cut in spending--in a $3.7T budget, some 40% or so unpaid for--mean less police on the street, fewer teachers in the classroom, or grandma eating cat food? What better targets for Democrats to prove the generosity of their bleeding hearts over those heartless bean-counter Republicans whom would surely deny a hungry Oliver Twist a second helping of gruel: how could these Scrooge's take bread from an unemployed parent's hungry child or balance the budget on the backs of the middle-class homeowner whose only major asset, his home, was flooded out under Hurricane Irene?
We all know how disingenuous Democrats have been--paying lip service during the last session of Congress to the concept of pay-as-you-go which is how you ended up with 24% increases in funding (not including the one-time spending of the massive 2009 stimulus bill). Yet the Senate approved a $6.9B budget. What about the current fiscal year (2011) ending next Friday? "Congress approved $2.7 billion to FEMA for the Disaster Relief Fund in fiscal year 2011 in addition to $2.8 billion in unused funds from the 2010 fiscal year. Another $1.8 billion in funds that were no longer needed from previous years were also made available to the disaster relief fund in fiscal year 2011." The House approved an increase for FY2011 of $1B, plus $2.7B for FY2012, with part of the budget offset by a reduction in a clean-energy program (no doubt motivated by the ongoing Solyndra scandal).
The Senate rejected (under filibuster rules) two amendments, one by Tom Coburn whom was looking to offset the entire budget by cost savings in eliminating duplicate resources and a second from Rand Paul, looking to offset part of the cost by certain foreign program expenditures (which won only about a third of the votes needed to pass cloture).
Now what's particularly noticeable here is Tom Coburn's amendment focusing on hundreds of billions of duplication in government; it passed 54-45 but failed to reach the 60-vote cloture minimum needed. I finally tracked down the roll call vote on Senate Amendment 610 here; a quick scan shows all 45 No's were Democrats, and the few 'yea' Democrat votes seemed to come from Senators standing for reelection (or expiring terms) next year: Webb (VA), Klobuchar (MN), McCaskill (MO), Nelson (NE), and Manchin (WV).
How would I have voted? Briefly: yea on Coburn; nay on Paul; yea on the $6.9B Senate bill; yea on the House bill. To explain: first of all, I look at the nature and fiscal materiality of the expenditure. I think when you're doing budget offsets, you look to spread the offset across the budget. You certainly don't go after key spending priorities by our Nobel Laureate President, such as foreign expenditures and clean energy; that's like teeing up the ball for Obama to veto it, and with a 15% approval rating, the Congress can't afford to play a game of political posturing which will be seen by the Democrats, not to mention the mainstream media as blatant political opposition, not principled opposition. Second, I don't think you risk a polarizing shutdown over a difference of only a few billion dollars in the context of a $3.7T budget. I know you have to start somewhere, and every dollar counts.
But you don't play a game of political chicken over "Mom, apple pie, and Chevrolet" issues. The Democrats, of course, would love nothing better than for certain ideological Republicans to be scapegoated for voting on the back of those affected by acts of God. Keep it simple, stupid! I want to see across-the-board cuts, which will be much more politically risky for Obama to oppose, because it is spread across everyone's pet programs and thus cannot be seen as partisan. Personally, I don't mind there's ANY cut Obama would stomach.
But I agree with fellow fiscal hawks like Senators Rubio, Vitter, and Toomey whom were among the double-digit GOP Senator voters in support of the $6.9B bill. I would argue to my fellow Tea Party supporters that we can't afford to be penny-wise, dollar-foolish (pound-foolish). We can't afford to throw away Senate seats like we did last year in Colorado, Nevada, and Delaware. The big battle is for material, big-dollar budgetary reforms. Have people forgotten how easily Paul Ryan's Medicare plan was disingenuously attacked by a political opportunist Democrat in capturing a GOP House seat earlier this year , vacant because of a resignation over a mild sex scandal. This was just one year after the Democrats made Medicare cuts a key funding source for ObamaCare. I suggest each GOP Congressman and Senator remember the famous Serenity Prayer:
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.
- Reinhold Niebuhr
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Don't Stop"
Friday, September 23, 2011
Miscellany: 9/23/11
Quote of the Day
The two terrors that discourage originality and creative living are fear of public opinion and undue reverence for one's own consistency.
Ralph Waldo Emerson
The Fox News/Google GOP Presidential Debate: Some Reflections
In my judgment, Mitt Romney clearly won this debate; it wasn't even close. But I want to comment on a number of specific points. Some of these will reflect on issues where my pro-market (economics libertarian) views contrast with many media conservative (law-and-order) standpoint. I suspect many of my readers don't like my pro-immigration views (I've sometimes seen readership go down after I write my position), but I don't write my opinions to be popular: I write them with conviction.
I don't think Rick Perry effectively presented his point of view on a couple of points--the HPV vaccine mandate and immigration.
Gardasil. First, for readers who did not read my comprehensive commentary on the Gardasil issue last Saturday, I recommend it as background. I have a nuanced opinion regard Rick Perry's decision to mandate the vaccine for tweenage girls. I did criticize Rick Perry earlier for what I considered his throwing Heather Burcham, a HPV vaccine advocate and dying from cervix cancer, under the bus. Perry last night referenced to Ms. Burcham although not directly by name. Here's the major point: there was a mandate, but parents could opt out. That is, children would be permitted to attend school; their parents simply had to sign a form. Here's what we know: women who die of cervical cancer have DNA markers of known strains of HPV, a sexually transmitted infection, one of the most common strains that many, if not most sexually active people have been exposed for at least some period of time during their lives. Gardasil is known to block those cancer-causing HPV strains. This is one of those rare cases where we know the cause of a cancer--the second most deadly to affect women worldwide--and can control it via a vaccine; vaccines are more effective when administered to an uninfected person, hence targeting 12-year-old girls before they become sexually active. (Doctors in the US are able to control for it indirectly through pap smears, a common diagnostic test.)
The charges regarding Gardasil product Merck's small campaign contribution or employment of a former Perry staffer are weak; for example, chief critic Michele Bachmann herself has taken in much more campaign contributions from pharmaceuticals. At the time, Gardasil was the only FDA approved vaccine to protect against salient HPV strains. (A second vaccine has since been released.) Texas, in fact, repealed Gov. Perry's executive order, and only two states mandate it--Virginia and DC; Virginia doesn't enforce its mandate. Perry has admitted the way he went about doing this was mistaken
What is truly pathetic here is the two most widely-known women in the GOP Presidential field, Michele Bachmann and Sarah Palin (not a declared candidate but often included in polls), have been criticizing Rick Perry's initiative, which by any objective analysis was motivated by a concern for women's health, and his executive order did include an opt-out procedure. It was not a case, say, of a school vaccinating one's child without parental knowledge or consent. I myself have been highly critical of health care mandates, but this isn't a case of, say, couples with fertility problems or men with erectile dysfunction trying to get other policyholders to subsidize their treatments.
Immigration. There were a cluster of points being made here. If I had been Governor Perry, I would have started off by rattling off a number of things all the conservatives could agree on: the President's shameless immigration policy by cherrypicking for political purposes which unauthorized visitors his Administration will pursue, his failure to crackdown on sanctuary cities, and of course operation Fast and Furious, which exacerbated violence by drug criminals in outlying border areas. Finally, I would have attacked the Administration for in essence failures in enforcement, aggravating crime in some areas (e.g., Phoenix). Why should city and state taxpayers have to take on the costs of ineffective border enforcement by the federal government? In fact, if I'm not mistaken, Perry is attempting to bill the federal government, and I would have stressed that point last night.
Second, there was a question of constitutionality of border state (and others) attempts to enforce immigration policy. Personally, I think it's morally hazardous policy and unconstitutional. Unconstitutional because border protection is a national/federal responsibility, and if states and municipalities are undergoing costs (in particular, crimes) because or inadequate border protection, those costs should be charged to the federal government.
Third, there is a question about fences--in particular, fences along Texas' contiguous border with Mexico. Rick Perry has responded in a number of ways, but basically he argues that he prefers things like drones (I'm not sure about whether satellite technology is also relevant). There are various things to point out. The first is something former Arizona governor and DHS Secretary Janet Napolitano has also said: build an X-foot wall, and they'll bring an X+1-foot ladder. Second is the fact that fences don't keep criminal elements from burrowing under the surface.
But let me point out some things which you won't hear from the anti-immigrant ideologues. First, we are in a pattern of reverse immigration. A lot of that has to do with diminished job prospects in a tough economy and improved opportunities within Mexico itself. The number of illegal immigrants since 2007 has gone down by 1.5 million; furthermore, only 1 in 7 returning illegal immigrants has anything to do with INS. According to Pew Hispanic Center, the number of illegal immigrant entries dropped by nearly two-thirds from 2005 to 2009.
Second, there are roughly 11 to 12M illegal immigrants, with just over half (50-53%) of those with unauthorized entry; the remainder include people with initially valid visas or border crossing cards but have violated the terms of their authorization. On a mixed-status household basis, roughly 8.8 of 16.6M people, including at least one illegal immigrant parent and children, involve an unauthorized immigrant. Of the 4.5 M children, some 3.8 M are American-born, which the Supreme Court has decided are American citizens based on the Fourteenth Amendment
Third, the economic impact of illegal immigrants is distorted. For example, many aliens purchase domestically produced goods and services (supporting professional services, e.g., real estate and law) and pay directly or indirectly various taxes (e.g., sales, property, payroll, etc.); one of the reasons underlying unauthorized entry is a dysfunctional temporary worker visa program, which can delay lawful entry by up to 3 years or more. Far from being a drain on the economy, an application of the US Applied General Equilibrium model suggests legalization of unauthorized workers would be a benefit to the US GDP of 1.27% or $180B, and eliminating all unauthorized workers would cost the economy in terms of productivity and lost higher-paying jobs by some $80B. Also, some of the government revenue/cost figures used by ideologues are disingenuous (note the above model took public expenditures into account); for example, given the fact that half of American workers pay no federal income tax (and many state and local income taxes are also similarly progressive), the fact of lower than average wages earned by unauthorized workers yield no relevant income tax revenue is an artifact of our progressive tax system; it is arbitrary and unfair to single out unauthorized workers among all other American citizens earning similarly low income.
One could argue, based on the above, that increased compliance (e.g., additional border patrol boots, fences, etc.) costs are counterproductive: instead of gathering visa fees and open, fair taxation of labor, we drive the economy underground: the coyotes--the criminals smuggling people across for thousands of dollars--profit, labor gets transacted in cash, etc. Farmers struggle to get labor to harvest crops; shortages of crops result in higher food prices. Labor shortages affect other aspects of the consumer experience, e.g., wait times to get served.
I have differences on two other points: employer verification and college residency costs. First, I don't believe it is my responsibility as a businessman to serve as a virtual ICE agent. I may need labor to achieve my business objectives. It's bad enough I have to withhold employee taxes for various government entities. But my issue is finding a person with the ability, skills and attitude to do the job. All I care about is his job performance, not what country he was born in, a fair wage for a decent day's work.
Second, I really, really disliked the attack on college resident tuition rates in Texas for children whom may have at least one unauthorized entry parent. I lost a lot of respect on this point for Rick Santorum. We already know on average most children in mixed-status family are American-born. These children are not only US citizens by birth, but they are Texas citizens/residents. A lot of these children have lived contiguously in the state to easily establish a Texas residency requirement. Many of these kids have never been been south of the border. These kids grew up in Texas schools, and yet someone is saying they shouldn't qualify for the same rate at state universities as their fellow classmates? Why? Haven't their parents paid (directly or indirectly) the same type taxes as others in their line of work? The exclusion of these American citizens/Texas residents based on status of their parents is discriminatory and unconscionable.
Is Obama A Socialist? NO. Mitt Romney was exactly right (and the only candidate, I believe, whom answered the question correctly). Obama IS a big spending liberal . Socialism involves state ownership of capital (e.g., if Obama was, say, to nationalize our domestic oil industry). There is a general distinction of negative and positive rights. The former involve the rights of the individual to be shielded from the coercive actions of others (e.g., you cannot keep me from expressing my point of view); the latter compel us to act on behalf of the rights of others, e.g., if I don't have resources, you must provide me with a public defender; you must guarantee me a livable stipend upon retirement; if I can't afford private education, you must provide me with an education; if I don't have money for health care, you must guarantee me life-saving medical treatment. This became explicitly addressed during the 2008 campaign; I recall writing about the famous 2001 WBEZ radio interview where he essentially said that the Constitution should guarantee positive rights but he isn't hopeful that the courts would agree. Now if you agree with positive rights for someone with no resources, that, in fact, necessarily means that person is being funded by other individuals, i.e., redistributionist. I would agree that he is a crony capitalist but not a socialist (although, granted, we still hold stock in AIG, the GSE's and car companies, but that was set in motion by government interventionist actions during the economic tsunami).
National Right to Work. This is an interesting question, because do we address crony unionism at the state or national level? Since union actions can affect interstate commerce, it can fall within the federal scope of the interstate commerce clause, hence Taft-Hartley enabled states to pass right-to-work laws, i.e., an employee is not coerced to join a union as a condition of employment. Some 22 states have right to work laws (free to join or not join a union). In compulsory-union states, according to the Supreme Court, an individual is required to cover only his share of costs relevant to cover the collective-bargaining process--not, for instance, political activities. Technically, I would argue that these rights (e.g., the First and Fifth Amendments) are intrinsic to our Constitutional rights. I completely agree with F.A. Hayek:
The Democrats, of course, in general are crony unionists; we saw this play out on the stage in Wisconsin early this year. We saw the public sector unions zealously protect unsustainable collective bargaining powers, holding the state taxpayers hostage to corrupt political bargains. The outrageous attempts of the Obama Administration to try to stop Boeing from opening a new plant in a right-to-work state (South Carolina) reinforces the need to protect basic human rights, not to be forced to subsidize a third party against my will as the price of exercising my natural right to work.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Dreams". Fleetwood Mac's only #1 hit and a Nicks composition. I've extensively commented on other Nicks' songs. I've found at least one good discussion of the song's lyrics here. I differ somewhat on my take. Rain is a heavily used metaphor in songwriting, symbolizing sad times or difficult periods; thunder can represent arguments, conflict or heartbreak. She makes it clear that it's his (Lindsey Buckingham's) decision to leave ("you say you want your freedom"). The way I take the line "thunder only happens when it's raining" is that conflict was part of their both being vested in their relationship, but it didn't characterize the whole of their relationship. I think "players only love you when they're playing" is not so subtle warning to Lindsey that the women he is meeting, e.g., groupies, are more motivated by superficial reasons, like his fame and fortune, not in him as a person, not like, for instance, when they first met while in school, when he as a junior asked her as a senior to join the band he was playing in.
I personally think she is being somewhat defensive here; she's hurt because he's leaving her, and she's telling him he won't find in these other women what they had together; perhaps he'll be sexually gratified, but these women really don't love him, and he'll find himself lonely, trying to rediscover what they had together.
What's interesting here is we hear a lot of songs out there that say similar things, but then we hear a typical response to the effect, "once you realize these relationships won't fulfill you like our relationship, I know you'll be back, and I'll take you back". Stevie isn't saying that at all; you feel a melancholic sense of resignation, of letting go; she knows that he won't be back, and she tries to put her best face forward wishing him well. He'll eventually learn the truth of these superficial relationships on his own, he'll learn from his mistakes, and maybe one day he'll find genuine love down the line: she still cares for him and truly wants him to be happy and not lonely.
This is an unusual song in many respects (e.g., a sad song with a dance beat to it). Oddly enough, I don't play it that often because I find it somewhat depressing and I prefer other breakup songs like ABBA's "Knowing Me, Knowing You". I think in "Dreams" we don't see any wistful hint of the good side of Lindsey's and Stevie's relationship (I think it's certainly implied) and so the song seems incomplete to me.
In the unlikely event Stevie ever read my interpretation, I suspect that she would shake her head in amazement of how clueless I truly am. That's true; I have had lousy judgment and experiences when it comes to dating.
The two terrors that discourage originality and creative living are fear of public opinion and undue reverence for one's own consistency.
Ralph Waldo Emerson
The Fox News/Google GOP Presidential Debate: Some Reflections
In my judgment, Mitt Romney clearly won this debate; it wasn't even close. But I want to comment on a number of specific points. Some of these will reflect on issues where my pro-market (economics libertarian) views contrast with many media conservative (law-and-order) standpoint. I suspect many of my readers don't like my pro-immigration views (I've sometimes seen readership go down after I write my position), but I don't write my opinions to be popular: I write them with conviction.
I don't think Rick Perry effectively presented his point of view on a couple of points--the HPV vaccine mandate and immigration.
Gardasil. First, for readers who did not read my comprehensive commentary on the Gardasil issue last Saturday, I recommend it as background. I have a nuanced opinion regard Rick Perry's decision to mandate the vaccine for tweenage girls. I did criticize Rick Perry earlier for what I considered his throwing Heather Burcham, a HPV vaccine advocate and dying from cervix cancer, under the bus. Perry last night referenced to Ms. Burcham although not directly by name. Here's the major point: there was a mandate, but parents could opt out. That is, children would be permitted to attend school; their parents simply had to sign a form. Here's what we know: women who die of cervical cancer have DNA markers of known strains of HPV, a sexually transmitted infection, one of the most common strains that many, if not most sexually active people have been exposed for at least some period of time during their lives. Gardasil is known to block those cancer-causing HPV strains. This is one of those rare cases where we know the cause of a cancer--the second most deadly to affect women worldwide--and can control it via a vaccine; vaccines are more effective when administered to an uninfected person, hence targeting 12-year-old girls before they become sexually active. (Doctors in the US are able to control for it indirectly through pap smears, a common diagnostic test.)
The charges regarding Gardasil product Merck's small campaign contribution or employment of a former Perry staffer are weak; for example, chief critic Michele Bachmann herself has taken in much more campaign contributions from pharmaceuticals. At the time, Gardasil was the only FDA approved vaccine to protect against salient HPV strains. (A second vaccine has since been released.) Texas, in fact, repealed Gov. Perry's executive order, and only two states mandate it--Virginia and DC; Virginia doesn't enforce its mandate. Perry has admitted the way he went about doing this was mistaken
What is truly pathetic here is the two most widely-known women in the GOP Presidential field, Michele Bachmann and Sarah Palin (not a declared candidate but often included in polls), have been criticizing Rick Perry's initiative, which by any objective analysis was motivated by a concern for women's health, and his executive order did include an opt-out procedure. It was not a case, say, of a school vaccinating one's child without parental knowledge or consent. I myself have been highly critical of health care mandates, but this isn't a case of, say, couples with fertility problems or men with erectile dysfunction trying to get other policyholders to subsidize their treatments.
Immigration. There were a cluster of points being made here. If I had been Governor Perry, I would have started off by rattling off a number of things all the conservatives could agree on: the President's shameless immigration policy by cherrypicking for political purposes which unauthorized visitors his Administration will pursue, his failure to crackdown on sanctuary cities, and of course operation Fast and Furious, which exacerbated violence by drug criminals in outlying border areas. Finally, I would have attacked the Administration for in essence failures in enforcement, aggravating crime in some areas (e.g., Phoenix). Why should city and state taxpayers have to take on the costs of ineffective border enforcement by the federal government? In fact, if I'm not mistaken, Perry is attempting to bill the federal government, and I would have stressed that point last night.
Second, there was a question of constitutionality of border state (and others) attempts to enforce immigration policy. Personally, I think it's morally hazardous policy and unconstitutional. Unconstitutional because border protection is a national/federal responsibility, and if states and municipalities are undergoing costs (in particular, crimes) because or inadequate border protection, those costs should be charged to the federal government.
Third, there is a question about fences--in particular, fences along Texas' contiguous border with Mexico. Rick Perry has responded in a number of ways, but basically he argues that he prefers things like drones (I'm not sure about whether satellite technology is also relevant). There are various things to point out. The first is something former Arizona governor and DHS Secretary Janet Napolitano has also said: build an X-foot wall, and they'll bring an X+1-foot ladder. Second is the fact that fences don't keep criminal elements from burrowing under the surface.
But let me point out some things which you won't hear from the anti-immigrant ideologues. First, we are in a pattern of reverse immigration. A lot of that has to do with diminished job prospects in a tough economy and improved opportunities within Mexico itself. The number of illegal immigrants since 2007 has gone down by 1.5 million; furthermore, only 1 in 7 returning illegal immigrants has anything to do with INS. According to Pew Hispanic Center, the number of illegal immigrant entries dropped by nearly two-thirds from 2005 to 2009.
Second, there are roughly 11 to 12M illegal immigrants, with just over half (50-53%) of those with unauthorized entry; the remainder include people with initially valid visas or border crossing cards but have violated the terms of their authorization. On a mixed-status household basis, roughly 8.8 of 16.6M people, including at least one illegal immigrant parent and children, involve an unauthorized immigrant. Of the 4.5 M children, some 3.8 M are American-born, which the Supreme Court has decided are American citizens based on the Fourteenth Amendment
Third, the economic impact of illegal immigrants is distorted. For example, many aliens purchase domestically produced goods and services (supporting professional services, e.g., real estate and law) and pay directly or indirectly various taxes (e.g., sales, property, payroll, etc.); one of the reasons underlying unauthorized entry is a dysfunctional temporary worker visa program, which can delay lawful entry by up to 3 years or more. Far from being a drain on the economy, an application of the US Applied General Equilibrium model suggests legalization of unauthorized workers would be a benefit to the US GDP of 1.27% or $180B, and eliminating all unauthorized workers would cost the economy in terms of productivity and lost higher-paying jobs by some $80B. Also, some of the government revenue/cost figures used by ideologues are disingenuous (note the above model took public expenditures into account); for example, given the fact that half of American workers pay no federal income tax (and many state and local income taxes are also similarly progressive), the fact of lower than average wages earned by unauthorized workers yield no relevant income tax revenue is an artifact of our progressive tax system; it is arbitrary and unfair to single out unauthorized workers among all other American citizens earning similarly low income.
One could argue, based on the above, that increased compliance (e.g., additional border patrol boots, fences, etc.) costs are counterproductive: instead of gathering visa fees and open, fair taxation of labor, we drive the economy underground: the coyotes--the criminals smuggling people across for thousands of dollars--profit, labor gets transacted in cash, etc. Farmers struggle to get labor to harvest crops; shortages of crops result in higher food prices. Labor shortages affect other aspects of the consumer experience, e.g., wait times to get served.
I have differences on two other points: employer verification and college residency costs. First, I don't believe it is my responsibility as a businessman to serve as a virtual ICE agent. I may need labor to achieve my business objectives. It's bad enough I have to withhold employee taxes for various government entities. But my issue is finding a person with the ability, skills and attitude to do the job. All I care about is his job performance, not what country he was born in, a fair wage for a decent day's work.
Second, I really, really disliked the attack on college resident tuition rates in Texas for children whom may have at least one unauthorized entry parent. I lost a lot of respect on this point for Rick Santorum. We already know on average most children in mixed-status family are American-born. These children are not only US citizens by birth, but they are Texas citizens/residents. A lot of these children have lived contiguously in the state to easily establish a Texas residency requirement. Many of these kids have never been been south of the border. These kids grew up in Texas schools, and yet someone is saying they shouldn't qualify for the same rate at state universities as their fellow classmates? Why? Haven't their parents paid (directly or indirectly) the same type taxes as others in their line of work? The exclusion of these American citizens/Texas residents based on status of their parents is discriminatory and unconscionable.
Is Obama A Socialist? NO. Mitt Romney was exactly right (and the only candidate, I believe, whom answered the question correctly). Obama IS a big spending liberal . Socialism involves state ownership of capital (e.g., if Obama was, say, to nationalize our domestic oil industry). There is a general distinction of negative and positive rights. The former involve the rights of the individual to be shielded from the coercive actions of others (e.g., you cannot keep me from expressing my point of view); the latter compel us to act on behalf of the rights of others, e.g., if I don't have resources, you must provide me with a public defender; you must guarantee me a livable stipend upon retirement; if I can't afford private education, you must provide me with an education; if I don't have money for health care, you must guarantee me life-saving medical treatment. This became explicitly addressed during the 2008 campaign; I recall writing about the famous 2001 WBEZ radio interview where he essentially said that the Constitution should guarantee positive rights but he isn't hopeful that the courts would agree. Now if you agree with positive rights for someone with no resources, that, in fact, necessarily means that person is being funded by other individuals, i.e., redistributionist. I would agree that he is a crony capitalist but not a socialist (although, granted, we still hold stock in AIG, the GSE's and car companies, but that was set in motion by government interventionist actions during the economic tsunami).
National Right to Work. This is an interesting question, because do we address crony unionism at the state or national level? Since union actions can affect interstate commerce, it can fall within the federal scope of the interstate commerce clause, hence Taft-Hartley enabled states to pass right-to-work laws, i.e., an employee is not coerced to join a union as a condition of employment. Some 22 states have right to work laws (free to join or not join a union). In compulsory-union states, according to the Supreme Court, an individual is required to cover only his share of costs relevant to cover the collective-bargaining process--not, for instance, political activities. Technically, I would argue that these rights (e.g., the First and Fifth Amendments) are intrinsic to our Constitutional rights. I completely agree with F.A. Hayek:
The need for special legislation concerning [union privileges] would probably not have arisen in common-law countries. But, once special privileges have become part of the law of the land, they can be removed only by special legislation. Though there ought to be no need for special 'right-to-work laws,' it is difficult to deny that the situation created in the United States by legislation and by the decisions of the Supreme Court may make special legislation the only practicable way of restoring the principles of freedom.I support, and the Republican Party should endorse, a National Right to Work Law to restore basic individual rights to workers in the remaining 28 states. Of course, I support the passage of state right-to-work laws in the other states.
The Democrats, of course, in general are crony unionists; we saw this play out on the stage in Wisconsin early this year. We saw the public sector unions zealously protect unsustainable collective bargaining powers, holding the state taxpayers hostage to corrupt political bargains. The outrageous attempts of the Obama Administration to try to stop Boeing from opening a new plant in a right-to-work state (South Carolina) reinforces the need to protect basic human rights, not to be forced to subsidize a third party against my will as the price of exercising my natural right to work.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Dreams". Fleetwood Mac's only #1 hit and a Nicks composition. I've extensively commented on other Nicks' songs. I've found at least one good discussion of the song's lyrics here. I differ somewhat on my take. Rain is a heavily used metaphor in songwriting, symbolizing sad times or difficult periods; thunder can represent arguments, conflict or heartbreak. She makes it clear that it's his (Lindsey Buckingham's) decision to leave ("you say you want your freedom"). The way I take the line "thunder only happens when it's raining" is that conflict was part of their both being vested in their relationship, but it didn't characterize the whole of their relationship. I think "players only love you when they're playing" is not so subtle warning to Lindsey that the women he is meeting, e.g., groupies, are more motivated by superficial reasons, like his fame and fortune, not in him as a person, not like, for instance, when they first met while in school, when he as a junior asked her as a senior to join the band he was playing in.
I personally think she is being somewhat defensive here; she's hurt because he's leaving her, and she's telling him he won't find in these other women what they had together; perhaps he'll be sexually gratified, but these women really don't love him, and he'll find himself lonely, trying to rediscover what they had together.
What's interesting here is we hear a lot of songs out there that say similar things, but then we hear a typical response to the effect, "once you realize these relationships won't fulfill you like our relationship, I know you'll be back, and I'll take you back". Stevie isn't saying that at all; you feel a melancholic sense of resignation, of letting go; she knows that he won't be back, and she tries to put her best face forward wishing him well. He'll eventually learn the truth of these superficial relationships on his own, he'll learn from his mistakes, and maybe one day he'll find genuine love down the line: she still cares for him and truly wants him to be happy and not lonely.
This is an unusual song in many respects (e.g., a sad song with a dance beat to it). Oddly enough, I don't play it that often because I find it somewhat depressing and I prefer other breakup songs like ABBA's "Knowing Me, Knowing You". I think in "Dreams" we don't see any wistful hint of the good side of Lindsey's and Stevie's relationship (I think it's certainly implied) and so the song seems incomplete to me.
In the unlikely event Stevie ever read my interpretation, I suspect that she would shake her head in amazement of how clueless I truly am. That's true; I have had lousy judgment and experiences when it comes to dating.
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