Miscellany: 10/31/11

Quote of the Day 

Experience teaches slowly and at the cost of mistakes.
James A. Froude

Blog Readership Update

October readership was at a multi-month high (the highest cumulative pageviews since May). International readership was nominal.

Meet the Press: A Rant on 10/30/11: Part 2

Before continuing the excerpts, it struck me in my long discussion yesterdayof some Plouffe rhetoric, I did not directly respond to Plouffe's assertion that the $447B Stimulus v. 2  American Jobs Act would create up to 2 million jobs. I have addressed this point in earlier commentaries; I pointed out, among other things, that relevant economics models (e.g., Zandi of Moody Analytics) have dubious baked-in Keynesian assumptions of job growth with government expenditures and certain multiplier effects.

Among other things, Obama intends to pay for these with permanent tax increases on upper income taxpayers: this adversely affects economic growth and reduces the tax base. The idea that a government that can't even balance its own checkbook and a President whom has not done a single statistically significant thing to cut spending over the past 3 years and in fact has massively increased spending (over and beyond the massive stimulus bill, 24% of domestic expenditures, way over inflation); at a time when state and local governments have had to cut budgets and layoff some workers, the federal government (ignoring temporary Census employment) has actually grown (the last statistic I saw was 13%). Obama is constantly finding new disingenuous synonyms to cloak the reality of tax-and-spend policies: "investments" in boondoggle green energy projects. The fact is--there is no such thing as a free lunch: sooner or later, we are going to have repay that debt; that doesn't mean the Democratic strategy of playing games with budget increases 10 years down the line. Even if somehow we manage to balance the budget in 10 years, that means the national debt is going to grow a lot bigger than $15T. Obama has already added $4T to the national debt--roughly 2 years of federal revenues.

When exactly is going to be a good time to pay that back? Look at Barack Obama complaining that he is acting against his own party base in looking at some concessions (e.g., raising retirement age) years after his Presidency ends! Oh, cry me a river! While governors, Democrats and Republicans, are looking at cutting services, raising college tuition rates and laying off people, what has Barack Obama given up in the short term (other than maybe smoking and gutting defense research programs)? His only concession has been to suspend TEMPORARILY an unprovoked class warfare attack on the only income group that pays twice their share of national income in tax burden, while 47% of workers not only don't pay a penny towards the cost of government and in fact often receive goods and services. [Disingenuous progressives often argue that payroll taxes are taxes. But these taxes, net of distributions to current beneficiaries, constitute loans to cover federal operations, not direct payment. In addition, some programs like the earned income tax credit serve to offset that cost.

Some states and municipalities have been better governed (e.g., Minnesota, Indiana, West Virginia and Texas) than others (say, Illinois and California). The latter states made unsustainable commitments; I mentioned in an earlier post how Sen. Joe Manchin (D-WV) as then governor did not need to resort to laying off key public sector employees during the 2007-2009 recession; West Virginia basically created a rainy day fund to offset incoming stimulus fund money. It is the state residents whom elected spendthrift Democrats whom went on unsustainable public sector hiring sprees (e.g., in lowering student/teacher ratios) and negotiated taxpayer-unfriendly public sector collective bargaining agreements. In case the reader thinks I'm just on an anti-union rant, consider the following excerpt from Bloomberg [kudos to Carpe Diem for the tip]:

[California men's prison nurse] Jean Keller earned $269,810 last year...tripling her regular pay with overtime hours...California’s public workers collected $1.7 billion of extra pay last year, ...in overtime, unused vacation and [miscellaneous] union-negotiated benefits (e.g., uniform allowances, physical-fitness incentives and “complex work load" conpensation)... [To make room for union extra pay, the California legislature] cut school spending and services for poor children and the elderly. [NB: $1.7B could pay for 25,000 school teachers.]

I expect Nurse Keller would put up the Sally Brown defense ("all I want is my fair share"), but the point I'm making here is why the American taxpayers should have to pay for California teachers, when California's governors (Arnold Schwarzenegger and now Jerry Brown) and Democratic-dominated legislators haven't had the balls to jawbone the public sector unions into making long-overdue concessions? It is moral hazard on steroids to bailout California, i.e., to reinforce the dysfunctional behavior of California state and local governments.

PLOUFFE: Every independent economist who's looked at the Republican jobs plan in Washington says it wouldn't do anything to create jobs in the short-term. One macro-economic adviser's actually said their agenda could lead to the destruction of millions of jobs and economic and political upheaval.

First, let's reprise Plouffe's earlier estimate that the President's "jobs plan" would create nearly two million jobs. FactCheck looked at the claim; the White House submitted the names of TWO economists whom estimated nearly 2 million jobs: Zandi of Moody Analytics and Prakken of Macroeconomic Advisers. In a rare charitable nod to the White House,  I think FactCheck misinterpreted what Prakken said; whereas Zandi cited 1.9M next year, Prakken said 1.3M next year and an additional 800,000 in 2013. (FactCheck seems to believe that Prakken implied 500,000 of those jobs were temporary in nature.)  However, the Bloomberg panel of 34 economists showed only 2 whom forecast at least 2M due to Obama's pet legislation over 2012-2013, the median being 288,000 (the bulk in the first year because of Obama's proposed increase in the payroll tax holiday). This is in comparison to 1.2M added by the private sector over the past year.

So, to say the least, Obama picks and chooses his economists much like he picks and chooses winners and losers in the private sector (if we take a look at Solyndra, I think it's safe to say Obama is better at picking losers).

The biggest bang of the jobs package comes from the increase in the payroll tax holiday--in a rather transparent attempt to artificially goose the economy in an election year where Obama is up for reelection. When the payroll holiday expires in 2013--taking 3% of worker pay back out of the economy. How do you think the same models will react to that news? You see, Obama is trying to argue that Republicans are being inconsistent by not going along with his attempts to manipulate the election, when it looks that a double-dip recession is less likely based on the latest GDP statistics.

Plouffe, of course, is a polemicist (and not very good one at that); what did the Obama Administration's chosen two economists say about the Republican plan? Consider the following excerpt from The New York Times:

Joel Prakken, chairman of Macroeconomic Advisers, said Republicans had “reasonable ideas” but not ones that could be measured by the firm’s forecasting model...Mark Zandi, chief economist at Moody’s Analytics, similarly said the Republican proposals “are generally good longer-term economic policy, but they won’t mean much for the economy and job market in the next year.”

The Republicans oppose it because they never bought the effectiveness of the original (2009) stimulus in the first place, and this spending cuts a big chunk out of the recent debt ceiling increase, hastening the day towards another showdown over Obama's spendthrift ways.

I want to add some of my own concerns here: the kinds of market interventions being discussed are hardly standard tools, never mind things done in a weak but still growing economy. I think it sets a very poor precedent for future economic weakness, and I definitely think that Republicans and conservatives should oppose rewarding progressive Democratic overspending by agreeing to raise taxes. How many times do I need to remind my fellow conservatives that both Reagan and Bush Sr. agreed to tax increases in exchange for spending cuts that never happened? We should refuse any agreement to raise taxes until we return spending to FY2008 levels, nonnegotiable; Democrats will never agree, exposing their utter hypocrisy when it comes to fiscal discipline. The Democrats have been playing accounting games with almost every piece of legislation they've passed.

Furthermore, I would argue that all these interventions are like the dysfunctional Cash for Clunkers program, only on steroids. There is virtue in patience and letting the economy be the economy. We need to let the economy to function without the obfuscating distortions of market interventions. When Obama and Plouffe argue that we must intercede, it indicates manifestly a distrust in the free market.

The GOP plan focuses on the supply instead of the demand side of the economy. Effectively, they argue that government regulations, unfair and globally uncompetitive business taxes and excessive demand for investment to paper over an unsustainable deficit and debt raise the costs of doing business--which hampers business and job growth. I believe that Plouffe's fear-mongering is based on a comment Prakken made with reference to the short-term implementation of a balanced budget amendment, i.e., what would happen if we suddenly drained $1.3T of federal government spending out of the economy?

First of all, let's pretend that business won't benefit not having the federal government competing with it for $1.3T in investment dollars, that a shored up dollar won't increase the standard of living and we won't have to worry about federal interest expenses crowding out other government programs (cf. California discussion above). The fact is that Obama who has silently stood by without long-term deficit reduction or a credible budget while his own administration has projected trillion dollar deficits through the coming decade; he also has done nothing to shore up increasingly insolvent entitlement programs.

But, in fact, the more usual method of passing constitutional amendments (a two-thirds passage in both chambers of Congress) is all but impossible when you consider there are 53 Senate Democrats or caucusing independents, and I suspect none of them favors a balanced budget amendment. Moreover, even suppose the Congress passed it (when they couldn't even come to an agreement on a year-over-year budget cut), the chances of it being ratified by the requisite number of states within the next year or two is all but impossible.

PLOUFFE: There's a bigger picture here, which is we have to reclaim some of the middle class security by restoring basic American values. That's what the president's trying to do, where hard work and responsibility is rewarded and where everyone's playing by the same set of rules, both Wall Street and Main Street.

As a conservative, I find that Obama and Plouffe trying to argue "restoring basic American values" takes chutzpah. There is almost nothing this President or his Democratic colleagues have done, which furthers basic American values of hard work and responsibility. Their stealth creep of government program dependence reaching now into the middle class is the exact opposite of restoring basic values;  their class warfare taxation policies, punishing economic success, undermine the very concepts of entrepreneurship. Everybody playing by the same set of rules? Tell me what is fair about GE not paying corporate taxes while our largest energy companies pay the highest effective tax rates of any business--but Obama is obsessed with extracting even more  taxes from them. Tell me what is fair about violating the rule and intent of law by intervening during the auto bankruptcies on behalf of lower-standing union interests over higher-ranking bondholders, essentially rewriting the rule book on behalf of their crony special interests. Tell me what is fair about the Democrats giving the GSE's lucrative preferred Treasury finances, which gave the GSE's an unfair competitive advantage over their private sector competition, going from single digit percentage to almost half of market share in the secondary market. Tell me the fairness of Obama picking winners and losers in the market place, giving green market companies financing that the private sector itself sees as being too risky.

We conservatives are against crony capitalism; the point here is, Obama and his Democratic colleagues are part of the problem, not the solution. They simply believe that their special interests are "more equal".

PLOUFFE: Now, the president laid out his plan, which is we've already signed into law over $2 trillion of spending cuts.

That's absolutely misleading and false from a common sense understanding. CATO points out that the $2T in projected cuts (over the coming decade) boils down to $200B per year and it's in across-the-board decrease in even larger planned spending increases (the net of which CATO estimates at $1.8T). Only in the Alice in Wonderland world of progressive economics do you actually increase the budget by $180B a year while claiming you're cutting spending by $200B a year.  When most of us think of budget cuts, we think in terms, say, you spent $1000 last year, and this year you're spending $800; assuming stable prices, this means you're buying fewer widgets this year than last year. Now to put this in perspective, suppose you've planned your budget so instead of $1000, you have $1250 this year. What Plouffe is arguing (in terms of this example) is that we're cutting $200 from the proposed (not current/previous) budget. The end result is instead of $1250, you're getting $1050. But $1050 is still bigger than $1000. You can still buy more widgets with the extra $50. The tough decisions are not in cutting increases to programs but in cutting the programs themselves.

So from the perspective of true fiscal hawks like myself, when Plouffe is talking about spending cuts, he's talking about "Obama money": future budgets with automatic spending increases baked in. Cutting an imaginary budget is painless. The real cuts come in things like canceling programs or projects, personnel, etc.

PLOUFFE: American people look to Washington and say, "You didn't reduce the deficit," there's only one reason. It's because the Republican Party here in Washington refuses [to tax more from higher income people] because the Democratic Party's willing to do a lot more spending cuts.

Expletive deleted! Plouffe in the edited portion is talking about the super-Pease (e.g., limiting deductions, which would have the net effect of making more income subject to the highest bracket). We conservatives are willing to put across-the-board tax simplification on the books--in exchange for lower tax brackets--and in turn Obama has to give up his hodgepodge of special interest incentives, e.g., for green energy. But no back door class warfare tax hike--PERIOD! We believe that the economically successful people will do a better job of deploying their own income (whether spending or saving/investing) than Barack Obama and the other Politics of Envy Democrats.

But more to the point: been there, done that. As I previously mentioned, we've heard Democrats on multiple occasions promise to cut real spending in exchange for tax hikes, and it NEVER happens. The Democrats have burned their bridges on empty promises. What real cuts has Obama made? For over $10T in spending, Obama had one cut of $17B, half in defense research spending, and another $100M reduction; these aren't even statistically meaningful cuts. Do you really believe we are going to believe some party hack like Obama or Plouffe is going to make real cuts when they haven't shown a single good faith effort to date?

Also, it is unfair to taxpayers paying a disproportionate amount of taxes (like the economically successful, whom pay twice their share of income in relative tax burden) to pay even more, without asking for commensurate sacrifices from all other workers, including the 47% whom pay no federal income tax.

I'll resume my discussion (part 3) in my next post.

Political Humor

"President Obama had dinner with a U.S. postal worker who won a contest to meet him. The mailman was like, 'Wow, someone who takes longer to deliver than I do!'" - Jimmy Fallon

[During dinner, President Obama mentioned that he has had his own delivery problems; his supporters are wondering when he's going to keep his campaign promises. He noted that next year he's up against this guy, Herman Cain, whom promises to deliver within 30 minutes, or the government is free.]

An original:

• Where did Herman Cain come up with the idea for that campaign ad with the smoking chief of staff? Well, there was that campaign spot for California gubernatorial candidate Jerry Brown last fall--only the song in the background was "Puff, the Magic Dragon", and that wasn't a cigarette being smoked...

Musical Interlude: My Favorite Groups

Foreigner, "Cold As Ice".

Miscellany: 10/30/11

Quote of the Day

Emphasize everything and you emphasize nothing.
Herschell Gordon Lewis

New Nominee for Jackass of the Year 2011

My tongue-in-cheek annual award for uncivil or otherwise egregious behavior for Democratic politicians also qualifies for the Sore Loserman Award (my mocking reference for the unconstitutional efforts to steal the 2000 election by trying to cherry-pick its way and converting enough disqualified ballots through Democratic-controlled Florida election boards, after Florida confirmed Bush's victory through two objective statewide machine counts.) First-term progressive Democrat Steve Driehaus (OH-1) lost his reelection to the previous multi-term GOP incumbent, Steve Chabot. The loser Driehaus is suing a pro-life group, claiming its opposition to his pro-abortion choice views cost him his way of earning a living.

Ludicrously, an Obama federal district judge, Timothy Black, a past active member of the Cincinnati Planned Parenthood Association, instead of recusing himself, is allowing the frivolous lawsuit to proceed. I think IBD is right in suggesting a clear breach of judicial ethics. The lawsuit clearly violates the pro-life group's First Amendment rights, even disregarding the compelling argument that the right of the people to vote for the candidate of their choice is indisputable and can be based on any or no reasons.

Meet the Press: A Rant on 10/30/11: Part 1

When MTP has two of the most disingenuous party hacks around, the equally disagreeable David Plouffe and  former Michigan governor Jennifer Granholm, it's time for me to expand my recurring feature Sunday Talk Soup.

Let me say, before going on, that I'm not happy with the job my fellow conservative bloggers or media conservatives are doing. I think to a large extent a lot of what is going on is very reactive; you are never going to progress in the public media if you are shooting at decoys instead of the enemies' tanks. Learn how to pick your battles, and you need to press the attack.

The fact that mainstream editors and reporters have a hidden political agenda is obvious: we are spending 40 cents out of every federal dollar on borrowed money, the President now has pulled a nearly impossible hat trick of $1.3T or more annual deficits, and have I seen any reporter raise issues about cutting CURRENT spending? Talk about the myth of an obstructionist GOP, when the Democrats slammed through partisan legislation on health care, financial reform, and the stimulus act; talk about upper bracket tax rates when the proposed increase in taxes wouldn't even make a down payment on incremental debt--making it purely ideological in nature (but disastrous).

MR. PLOUFFE: Well, as you know, David, the president's put forward the American Jobs Act, which is something that would create up to two million jobs in the short-term, really give a jump-start to our economy.

Absolutely not true. About 54% of the $447B proposal comes in the form of a temporary payroll tax cut. For those of us whom believe in Friedman's permanent income hypothesis, major consumer decisions are not based on temporary gimmicks but on expectations of future income. In fact, the reports I've seen showed that much (if not most) of tax rebates over the latter Bush Administration and Obama Administration went to savings, not consumption, I've cited research that the issue has been more with business versus consumer spending. Moreover, the President is playing a shell game, because payroll tax cuts, unless offset by cuts elsewhere in the budget and directed to reserves, worsens an increasingly insolvent entitlement system.

The President is right about conservatives liking payroll tax cuts, but he's being disingenuous in knowingly failing to disclose two salient issues: (1) we prefer permanent to temporary tax cuts; (2) we differ in how to pay for the tax cut. When the President talks about his program being "paid for", he is talking about anti-economic growth back door class warfare tax hikes. By increasing the tax bite on higher-income workers, it displaces--and very inefficiently-- PERMANENTLY the consumption, savings and investment of those same people, the principal source of job creators. If you believe in the permanent income hypothesis, this will more surely affect consumer behavior--in the wrong directly. In essence, it has the impact of raising the cost of capital--and, of course,  whenever you raise the cost of something, like taxes on higher income, you inevitably get less of it, i.e., you shrink the tax base. Obama is trying to do this through an old trick (remember the first President George Bush?) that the Democrats devised:  the "super Pease" proposal which attempts to squeeze even more taxes out of given high income by filtering or capping allowable deductions: we are talking about a nearly 50% marginal tax rate.

Reynolds (cf. above) argues that extending two years of unemployment provides an adverse affect on unemployment of 0.8 to 1.8%. And, of course, bailing out state/local governments for politically favored public employee professions (e.g., teachers, police, and firemen) does not increase jobs but basically defers a day of reckoning for unsustainable staffing levels: and those jobs come at the expense of taxpayer discretionary spending and saving. I previously criticized Harry Reid's ludicrous argument that public sector workers are more equal than others, but let's recall the following fact:

"Between June 2008 and June 2010, according to data from the Bureau of Labor Statistics, the number of private-sector employees fell by six percent, but the number of state and local government workers declined by less than one percent."

 Another conservative blogger compared job levels from the prior recovery high in June 2007 for private and public sector: as of last April using BLS statistics, the private sector was still underwater by nearly 8 million jobs, while the public sector had actually slightly increased from 22 million jobs by a few hundred thousand.

Obama, to keep unemployment from rising, must grow jobs at roughly 150,000 a month--just to accommodate new workers: roughly 5 million new workers, over and beyond those laid off during his Presidency and previously laid off during the recession. I have mentioned out in recent posts that there are accounting games to use "Obama money" by creating rainy day funds or reallocating funding among government functions.

It would be one thing if Obama was calling broad-based sacrifice--including the 47% of workers not paying a dime for federal government operations--or broad-based tax simplification in place of his bias in favor of green energy boondoggles and other industrial policies fundamentally inconsistent with the free market. His process is purely ideological and intentionally discriminatory.

As for infrastructure spending: the devil is in the details. The Obama Administration picking the projects (e.g., high speed rail) is a non-starter; government-run rail services (e.g., Amtrak) rarely cover operating costs. I don't believe in paying for local school construction; that is yet another morally hazardous bailout.

But in the meantime, the president's going to do everything he can, whether it's on housing, student loans, we're going to keep this up.

First of all, the context in which the execution actions were announced, by saying he would act where the Congress won't, suggests the President's actions are unconstitutional; they are not authorized by the people (i.e., the Congress), and the President has materially violated the balance of powers. However, if passed legislation gave the President broad authorization on disbursement, say, of residual funds from TARP, then President Obama was intentionally misleading the American people for political reasons.

The housing action (to subsidize housing for high-risk applicants) shows a President absolutely out of touch with reality given the role high-risk mortgage loans played in the real estate market crash. What, of course, David Gregory did not note (I guess he doesn't read the Washington Post), is the fact Obama pledged to help 9 million homeowners with a $50B program; to date, since that money was allocated and available, Obama has spent just $2.4B and helped 1.7M; in the meanwhile, a quarter of homeowner mortgages are underwater. Don't get me wrong: I'm very happy that the President hasn't (yet) thrown $47.6B down the drain, but when he's trying to posture himself as this proactive leader--give me a break: it's taken him 2.5 years to issue this executive order? And he has the nerve to talk about a do-nothing Congress! But here's the point: if you're going to spend this money, why are you throwing it at high-risk homeowners?

As to student loans: basically, just like the housing action above, the President is exaggerating the significance of his executive order. Neal McCluskey of CATO points out that the actions focus on consolidating defunct guaranteed private loans (recall that the Democrats have nationalized student loans, yet another unconscionable intervention under the sham rationalization that a government that requires funding of $1.3T deficits is more efficient and effective in processing these versus other types of loans) with direct (federal) loans, which will save borrowers a narrow interest-rate differential between loans; but there are few that have both loans. In addition, Obama announced some loaner-friendly tweaks (payment amount, tenure) for long-term (> 20 years) student loans, but McCluskey points out these are of minor significance, because the average federal loan runs 10 years and that the average aggregate student loan is under $30K, which is more like buying a new car. He is justifiably scornful of the promise that these tweaks are of no additional cost. First of all, generous federal loan programs help prop up the college cost bubble. Second, certain degrees are more marketable than others (e.g., the humanities); do we expect English, art or philosophy majors to command decent salaries to work off six-figure college loans? And worse, what if they don't graduate? I do not believe that the Congress is any better at managing student loan risk any more than they were good at managing risk during the real estate bubble.

We're going to have a vote this weekend in the Senate on putting construction workers back to work rebuilding America. I find it impossible to believe, by the end of the year, that Republicans in Congress aren't going to report back to their constituents that they did something to help the economy, cut taxes for the middle class for small businesses, help rebuild America.

Do all those construction workers work for the US government? No, private industry. Construction workers are employed primarily by the private sector, for the private sector. And construction workers are not more equal than other workers, including white-collar workers, whom have been laid off during the recession. And certainly some infrastructure plays are more worthy than others (e.g., the Bridge to Nowhere). What we need is comprehensive economic growth policies, not the President pick and choosing which businesses (e.g., smaller scale) deserves preferred treatment.

The GOP House has already passed over a dozen bills languishing in the Senate, including a framework for long-term entitlement reform. If Obama was a legitimate, true leader, he would work with Boehner and McConnell on reaching a legitimate compromise, not pull a bait and switch on the American people, trying to pass off yet another Democratic tax-and-spend bill under the misnomer of being an "American jobs bill".

The single best things Obama could do for the economy would be to call a truce on ObamaCare, financial reform, and EPA's war on the private sector, roll back spending across the board beyond baseline numbers,  and work on comprehensive tax, regulatory and entitlement reform (without class warfare politics). I'm not holding my breath, because Obama's politics are all-or-nothing; he is incapable of legitimate compromise.

MR. GREGORY: But you talk about Republicans. In fact, the president's effectively campaigning against a do-nothing Congress of Republicans, but are Democrats a problem, too? Bill Daley, the chief of staff, told Politico this in a column with Roger Simon on Friday. "On the domestic side," Daley said, "both Democrats and Republicans have really made it very difficult for the president..."

For once, Gregory asks a reasonably good question, but I think there are nuances here. First, the tacit assumption is that Obama is above the fighting in Congress. He's not. He opposes the agenda of the GOP-controlled House. He is constantly threatening vetoes against GOP legislation.

I think the real issue is NOT a do-nothing Congress; it's a do-nothing, lead-from-behind President. What did he do with his own bipartisan deficit reduction committee which had majority support? Obama has distanced himself from the recommendations. Instead of building on that consensus, he had engaged in partisan sniping.

PLOUFFE: So there's only one reason, one reason we won't make a huge impact on the economy, and it's because the Republican Party...

The President's last massive spending proposal didn't measure up to its own criteria regarding employment and economic growth. The President has no credibility in this current tax-and-spend proposal, which is even less significant than the first one relative to the size of the economy.

The reason that Obama's Presidency has not had a huge impact (in the positive direction) on the economy is because of uncertainty in tax, regulate, and spend policies. He's done very little on the business side of the economy, other than an odd lot of tweaks to help small businesses but he's done other things that hurt small businesses.  It took him nearly 3 years to move on 3 trade pacts that had been pending long before George W. Bush left office. He has done very little to help alleviate American dependence on foreign energy supplies, while we own enough of our own; this has more to do with Obama's ideology in favor of green energy and the American economy is being held hostage by Obama's counterproductive economic ideology.

The fact is--Obama is trying to wring as much federal taxes out of business as he is from high income earners. Oh, he can talk about wanting to double American exports, but we were already on our way there DESPITE Obama, not because of him.

Let me make a point, the Republicans out in the country, mainstream, commonsense Republicans, whether it's having the wealthy pay a little bit more to help balance our budget and create jobs, doing things on jobs, the Republican Party out in America supports the things the president's trying to do. So you see this distance between the sort of tea party Republicans here in Washington and the presidential candidates and what Americans want.

Utter, pathetic rubbish. This is a laughably absurd attempt to divide-and-conquer Republicans. This is some sort of weird fantasy life that Obama and Plouffe are sharing. Go back to even the 2009 stimulus bill; the Maine GOP senators and Specter demanded considerable trimming of the original stimulus before they agreed. The moderate and conservative Republicans all loathe tax-and-spend policies and huge deficits; they all subscribe to pro-economic growth policies and strong defense policies.

I consider myself as part of the Tea Party (I'm far more libertarian than most members of the Tea Party), but I strongly supported Mike Castle in Delaware, Murkowski in Alaska, and more mainstream GOP candidates in Nevada and Colorado. I have supported, and continue to support, more moderate Republicans like Rudy Giuliani, Chris Christie and Scott Brown. I even initially supported Crist against Rubio in Florida until Crist backtracked out of teacher reform legislation in opening pandering for teacher union support. Moreover, Plouffe is disingenuously trying to portray the Tea Party as a radical faction of the GOP when in fact it includes a number of conservative Democrats and independents.

In fact, much of the opposition to the President does not come from the Tea Party but from media conservatives whom disliked progressive policies far before the Tea Party emerged. I've looked at several votes where the hardcore Tea Party members staked out a principled stand and they did not enjoy partisan support.

MR. GREGORY: Stimulus, financial reform, healthcare reform, all big measures. They didn't work out in terms of economic impact the way the administration expected they would. Here are the Republicans saying, "We don't want to go along with anymore." You call that obstruction. They call it principled opposition.

MR. PLOUFFE: Well, it's ironic. Let's remember what Senator McConnell said, which he said his number one goal was not to put people back to work, help the middle class grow the economy; it was to defeat President Obama. So that's where they started this president's term. So...

First of all, kudos to Gregory for doing a good job framing his point. You know, if I hear another intellectually challenged Democratic party hack misquote Mitch McConnell... These imbecilic analysts should not be surprised that the opposition leader wants a different President. Harry Reid publicly humiliated McCain during the TARP legislative process, right after McCain threw his support behind the legislation for which Reid was ecstatic. Obama is very difficult to deal with and unwilling to compromise unless his back is to the wall (like over the Bush tax cuts, 3 weeks before they were scheduled to expire). But what people forget is that the Senate GOP forced Obama to act because they filibustered Pelosi's class warfare tax hike earlier in the lame duck session.

What McConnell was saying was effectively comparing Obama to Clinton. The GOP found ways of making deals with Clinton, even though his policies were far more progressive/liberal than theirs. The GOP is not trying to oppose legislation because of antipathy to Obama; it's because they know Obama's tax, regulate, and spend agenda is against their own principled positions, as Gregory noted. I can say, without reservation, that the same bill would be opposed by all Republicans, regardless of whether Obama was President: it's that bad. All Plouffe is trying to do is repeat a big lie.

I'll continue my commentary in tomorrow's post.

Political Humor: The Cain Ad



Conan O'Brien's New Cain Ads



David Letterman's New Cain Ad



Absolutely lovely young Huntsman daughters...except they need to "shave" those upper lips. Ladies with mustaches better than mine intimidate me... (PS I like Huntsman)



Musical Interlude: My Favorite Groups

Foreigner, "Feels Like the First Time". There were two American rock bands in the 1970's that captivated me from their first hit singles and kept churning out classic rock hits: Boston and Foreigner. Lou Gramm, an outstanding rock vocalist, and Mick Jones crafted brilliant rock songs with memorable arrangements (I particularly like the bridge verse in this song). The only question I had was how could they possibly follow up an instant classic? And then I heard "Cold As Ice" for the first time...

Miscellany: 10/29/11

Quote of the Day

In the depth of winter, I finally learned that within me there lay an invincible summer.
Albert Camus

Jerry Brown and California Pension Reform:
A First Step But Not Good Enough

Governor Jerry Brown (D-CA) is an interesting enigma. Brown opposed Proposition 13 in 1978; property taxes had soared, in part due to strong housing demand pushing up prices, outstripping homeowner incomes (particularly older ones on more fixed income), as home prices doubled during the 1970's. The state Supreme Court made some equal protection public school rulings that, among other things, redistributed "surplus" property tax revenues (a principal source for local school funding) to unrelated poorer districts. In addition, other taxes had also significantly increased as public sector employment outstripped private sector job growth and California relative public sector expenditures were considerably above the national average.

Proposition 13 lowered property tax rates and significantly limited taxable increases in assessed values (until a change in ownership, new building, etc.); it also limited the ability of legislators to work around  these limits and established super majority roadblocks to raise compensatory tax increases elsewhere. From a conservative standpoint, the results are mixed; conservatives hoped to starve the beast, but instead what has developed is a system whereby the state returns roughly two-thirds of revenues back to local entities. In essence, this fosters undue dependence on the state. Since local governments are not held responsible for the politically difficult issues in raising a significant amount of their revenues, there's moral hazard.

Proposition 13 has become the third rail in California politics, just like senior entitlement programs have become the third rail at the federal level. But Jerry Brown was so zealous in enforcing Proposition 13 back in 1978, despite active opposition against its passage,  that Jarvis, the principal sponsor, endorsed his reelection months later and others started calling Brown "Jerry Jarvis".

Jerry Brown mangled a quixotic 1992 campaign against Clinton (for some inexplicable reason preannouncing Jesse Jackson, whom has been known for saying provocative things about Jews, as his VP choice), but he famously promoted a 13% flat tax The flat tax and Brown's antipathy to that piece of work, Bill Clinton, show two examples of good judgment.

My quick take on the Brown state/local/county pension reform proposal:

On the positive side:

• raised retirement age (55 to 67)
• restrictions on pension base period income spiking
• double-dipping reforms (e.g., salaried public employees drawing state pensions)
• mixed retirement system (pension plus 403B-style)
• employee cost sharing on pension contributions
• pension board reform (independent public vs. labor representatives)

On the negative side:

• little short-term relief/modest long-term relief
• need to renegotiate existing union agreements for givebacks
• need for compensation cuts/caps for current or near-term pensioners
• need for all new or younger (e.g., < 40) employees in defined contribution plans only
• need for substantive collective bargaining reforms

I think if it took anti-Communist Richard Nixon to reestablish diplomatic relations with the People's Republic of China, it could take union-supported Jerry Brown to make a first serious step towards fiscal sanity in California. But let's temper our enthusiasm here: we are literally just a few years away from a third of the Los Angeles budget devoted to pensions, and Jerry Brown seems to be doing the same old same old that we're seeing in Washington DC: whenever we talk about cuts, politicians don't have the balls to cut CURRENT budgets. They play games with automatic increases--in future years! I'm not going to give Jerry Brown a lot of credit here--he's inherited a mess, and the writing is on the wall: the pensions are  unsustainable. Brown can't sweep it under the rug. But even more notably: Jerry Brown has been part of the problem; he's the guy whom opened up the Pandora's box of unsustainable collective bargaining agreements.

It's tough enough for business owners in California without being tapped, despite already stiff taxes, to give Los Angeles and other California public entities more money to avoid making the politically tough decisions regarding unconscionable, unsustainable union demands. The last thing California workers need is anti-business growth tax hikes. So many progressives, pressing for Proposition 13 changes, are already demanding a two-tier tax structure where individuals are exempted from sharing in the economic pain--businesses are "less equal". It's about time California Democrats put the interests of the California residents over their parochial political interests. The issue is not that Californians are taxed too little: it's that California politicians spend too much!

Humor

Eighth-month-old Micah rejects the job rejection letter to his Dad. "I praise you, Father, Lord of heaven and earth, because you have hidden these things from the wise and learned, and revealed them to little children." Matt 11:25



Musical Interlude: My Favorite Grapevine

CCR, "Heard It Through The Grapevine". CCR's remake of the Marvin Gaye classic is worthy. Fogerty, as usual, has mad vocals. Even his accent ("I he-oid it through the grapevine") starts growing on you. That gravelly blue-eyed soul voice fits the verses like a glove.

Miscellany: 10/28/11

Quote of the Day

True wisdom is less presuming than folly. The wise man doubteth often, and changeth his mind; the fool is obstinate, and doubteth not; he knoweth all things but his own ignorance.
Akhenaton

Congratulations, St. Louis Cardinals: 
2011 World Series Champs!

Well, I believe in being a sportsman ("a person who exhibits qualities especially esteemed in those who engage in sports, as fairness, courtesy, good temper, etc.") I have been an American League fan all my life (oddly enough, the Minnesota Twins; I've discussed this in past posts), although the only major league games I've seen in person were with the Houston Astros during my graduate student days at UH. An odd coincidence: I did see Nolan Ryan pitch while he was with the Astros. Ryan finished his career with the Texas Rangers and is the principal owner, President, and CEO of the ball club.

So congratulations to the St. Louis Cardinals. I have two nephews and a beautiful niece whom live in the St. Louis area with my baby sister and her husband; I suspect they are Cardinal fans. On the other hand, I have 5 nephews and a niece whom live (or have lived) in the Dallas area with my younger middle sister and her husband, and I know for a fact that they are die-hard Rangers fans.

It was one of the most entertaining World Series in history, but this is the actual heading of the email I wrote last night to my second oldest Dallas area nephew: "Not good... Rangers blow World Series". The Texas Rangers were leading by 2 runs heading into the bottom of the ninth and tenth innings, and the Cardinals rallied to tie both times. That should never have happened. And then a Cards player (Bob Freese) hit a walk-off  home run (tie-breaking/game-winning home run by the home team in extra innings) in the next inning. I went on to tell my nephew that I don't think I've seen the losing team ever recover to win the next/clinching victory under similar circumstances.

Remember the epic Yankees-Red Sox series in 2004? The Yankees won the first 3 games--and then Boston came from behind to tie in the ninth and eighth innings of the next 2 games, winning both games in extra innings. I think everybody just knew the Yankees were done even though the final two games were in the Bronx. You just felt the whole momentum shift, as if the Red Sox were a team of destiny. The World Series was a mere after-thought.

I know enough about statistics to realize that my intuitive judgment is based on little more than a mere coincidence.

I give the Cardinals props. But tonight's game featured 6 walks and 2 hit batsman, leading to 2 runs in the fifth inning (e.g., with the bases loaded). Let's just say if I was the Rangers manager, knowing this was the last game of the season, I would have had every pitcher on my staff working the bullpen; heck, I myself would have warming up in the bullpen. I'm not trying to dump on the manager here, but walking batters with the bases loaded? Of course, the Cards won by more than 2 runs...

Barack "We Can't Wait" Obama: 
Abuse of Power or Incompetence?

It would be funny if it wasn't so sad and pathetic. How stupid and gullible does Obama think the American people are? For instance, progressive Democrats are always disingenuously bitching that the Republicans were stopping everything. At the same time they bragged they were able to pass over 40 laws during the 111th Congress. The GOP couldn't stop the stimulus bill, the health care bill, or the financial reform bill. The Democrats had, after a Republican Senator defection, a filibuster-proof Senate majority. Did they take up the expiring (2010) Bush tax cuts then? No. They waited until after Scott Brown unexpectedly won Kennedy's old Senate seat in early 2010--in fact, after the mid-terms in November and into December. (The reason there was an election of Brown in the first place was because the Massachusetts Democrats were paranoid that Gov. Romney would name a Republican to fill out the term of John Kerry, whom they expected would defeat George W. Bush to be President in 2004.)

Now the Democrats' procrastination on Bush tax cuts caused issues for American businesses which did not have closure over tax rates and relevant considerations with New Year withholding. (It sounds fairly innocuous--just change a few numbers in the computer database, right?)  I've had to deal with payroll issues all the time as the corporate DBA--I even had to deal with issues of printer jams with very expensive payroll check forms, resetting payroll batches, etc. There are month/quarter/year end processes and reports. You need to do due diligence on major changes--and on top of everything else, you have a lot of staff (including accounting staff) taking vacation days, along with holidays at year end.

Just to give an illustrative example, I was the contractor production DBA for a Chicago public entity a few years back. I won't going into specifics here but a vendor I did not work for was tasked with a very aggressive upgrade schedule. (They started in mid-August with go live (with the target upgraded database/ ERP system) in mid-November.) This project was the worst managed I've ever encountered from both the city and the vendor--for example, by the end of October, the city hadn't even acquired the software licenses needed to process payroll updates. Within the first 6 weeks, the project manager didn't even have a single upgraded test database. I was then basically asked to step in and help (in addition to my regular production duties). The whole process was hyper-political; the project manager didn't want me on the project because I was not his resource. My boss was trying to charge off some of my hours on the project, although I was still doing my regular job. (And my rate was bargain basement.)  I was in project meetings where the malcontent junior DBA's were complaining about working in the (cold) server room and wanted the city to buy them software for doing work from the comfort of their cubicles. (It was an artifact of  the entity using Windows as the database platform.)  However, I'm not writing to talk about dysfunctional projects; after all, the federal government has more than its own fair share. The point is--the entity was inflexible: it had to do the upgrade by mid-November or it would be a no-go (until sometime in the spring). I was sounding alarms by mid-October; as good as I am, I cannot change the laws of physics. I was dealing with software bugs, data problems, and various other issues the prior contractors hadn't encountered because they had never gotten to my stage of the process. We wouldn't be able to finish by mid-November. The managers were in a state of denial.

The point of going through this real-life example is to illustrate how important the time element is for end-of-year processing, even in the public sector. And they weren't even dealing with potential changes in tax policy. So here we have Obama not moving towards a compromise until literally less than a month before the tax cuts are ready to expire. You can only explain this by an anti-business President absolutely clueless of how businesses are run in the real world.

And so now, let's flash forward to the middle of the summer. Obama is talking about a jobs program--which is literally nothing more than a lower-scale Stimulus 2.0.  For weeks beforehand, he has Washington buzzing over the details his Nixonian secret plan. You can go back and read my speculations on this, but I remember at the time thinking: the only thing Obama knows how to do is to spend money; all he's going to do is bang his head on the wall and window-dress old tried-and-failed policies.

But also remember, the one point over all this was covered by the media at the time: if Obama really had a mythical Nixonian secret plan to "fix" unemployment (what would have surprised me was if I had done something truly patriotic, like putting a politically radioactive ObamaCare on hold), why would he wait a few weeks to demonstrate the profundity of his Keynesian stroke of genius?

I mean, think of it: in prescription drug trials, if it becomes apparent that the drug is a winner, a live-saver, do you let the control group people (without the drug) waste away and die,  or do you give them the benefit of the new meds? Everyone knows what happens: you stop the testing and treat the control group; it's a matter of science ethics.

So what I'm saying is this is a very similar concept: if you know the answer to resolving job growth from a government fiscal approach, why are you teasing to wait? Is it fair to unemployed people whom had to live several more weeks on suboptimal income without the benefit of Obama's "economic genius"?

We now have a President whom decides that while we weren't in a hurry this past summer, we "can't afford to do nothing" now, and those dastardly Republicans are to blame.

How many times have we heard him intentionally misrepresent GOP policy? He talks nonsense about deregulating environmental policy and various other straw men.  There's a big difference between trying to abuse the EPA's authority instead of working policy through the Congress and eliminating the EPA. Nobody thinks that the GOP is talking scaling back clean water regulations, basic air quality standards or anything like that. We conservatives are tired of having to deal with endless delay tactics by natural resource-unfriendly Democrats and environmentalists on letting us harvest timber or explore for oil and gas.

First of all, I'm sick and tired of hearing Obama's continued manufactured crisis mode politics: "we can't afford to do nothing". Wrong, Mr. Empty Suit! What we can't afford is an incompetent President pushing us into doing exactly the wrong type things! For example, Cash for Clunkers was little more than a giveaway to people planning to buy a new car in the first place although some people may have pushed up their later planned purchases to take advantage of the program. It borrowed from Peter to pay Paul.

Second, the policy type prescriptions by Obama won't deliver to his rhetoric. We have a $15T economy: the idea that several millions here or a few billion there is going to materially impact the economy is patently absurd. Obama has to know that; he is knowingly setting unrealistic expectations--mostly for political benefit. He is trying to mislead people he's doing everything he can to grow the economy; we know these Keynesian solutions don't do anything meaningful given poor multipliers. What he wants to do is tell voters: those dastardly Republicans won't let me have what I really want--another $862B stimulus. So I'm going to do all these things that don't add material squat to the economy and when the economy doesn't respond, I'm going to tell the voters that the GOP wouldn't let me have what I really wanted (never mind what I really wanted never made any substantive difference in the first place).

So now the talking point of the moment is: I need to do all these things on my own because the Congress won't rubber-stamp my agenda.

First of all, Mr. Pied Piper of Failed Liberalism: the GOP-led House is the 800-lb. gorilla. They were elected on not supporting overextended government. You need to NEGOTIATE. That means you don't get some of the things you want, and Speaker Boehner doesn't get some of the ones he wants.Your demand for the House Republicans to capitulate is dead on arrival.

Second, you have a big problem, just like trying to explain away why you didn't release details of your jobs plan earlier. The GOP can always say, if we had your plan weeks earlier, we could have evaluated it earlier. So you are directly responsible for any delays.

But you have a very difficult problem on your hands with: I'm forced to act on my own because the Congress won't do something. (No doubt this is motivated by the recent 9% approval ratings of the Congress.)

This seems to suggest that you have to work on your own because the Congress won't--presumably the same things. Now, Mr. Lawyer: if you were entitled to work on your own, why bring the Congress into the equation in the first place? More importantly, if these actions were constitutional, why haven't you already done them? You weren't aware of things you could do on your own to resolve the unemployment problem? What's your excuse?  In fact, the President cannot unilaterally impose policies; that power is reserved by the people's voice, i.e., Congress.


Political Humor

"According to USA Today, 74 percent of Americans plan to hand out candy this Halloween. Although President Obama thinks it should be just the top 1 percent." - Jay Leno

[Silly Jay! President Obama would empower all Democratic politicians or registered voters to get credit for give out "free" candy. He just expects the top 1 percent to pay for the candy...]

"A new poll released today by Fox News has former godfather's pizza CEO Herman Cain leading the Republican candidates for president. And he's the funniest candidate by about 40 points." - Jimmy Kimmel

[The CEO's of Pizza Hut, Domino's and Papa John's filed their papers for the GOP nomination, noting that they operate more stores and have created more jobs than Herman Cain ever did.... 


On a separate note, Cain accused Mitt Romney of supporting Obama because Romney sent leftover Gino's pizza as a prank to Obama campaign headquarters while on a campaign trip to Chicago back in May. The Obama campaign objected to Romney's 'trickle-down pizza' policy. Romney accused Cain of sour grapes because Gino's comes before Godfather's in the yellow pages.]




Musical Interlude: My Favorite Groups

CCR. "Someday Never Comes." My CCR series will conclude over the weekend. The next group I'll be covering is Foreigner.

I really hadn't heard this CCR performance until recently. Fogerty's pacing of the lyrics makes for one of the deft vocal performances I've heard; I never performed beyond high school choir, but what he does here is hard to do. As a fellow writer, I try to be the songwriter's singer; I'm not a "I bet I can do more octaves than you can" Mariah Carey-type singer; I personally find the little signature bits (like Carey's operatic warbling and the late Michael Jackson's grunts) annoying.  I'm not impressed by how long you can hold a note. We get it: you've got pipes. Move on...

It always amuses me to hear an opera singer do a pop song; I usually can just barely make out the words. Often I can't even make out the song they're trying to sing. It's almost like Dolly Parton trying to squeeze into a training bra.

Great pop singing is an art; you need to be able to convey the meaning, the emotion behind the lyrics. You fit your vocals gently about the verses, you milk them: it's not about you, the singer--it's about the song.

When I listened to this song, I wasn't thinking about yet another brilliant performance by one of the greatest rock singers of all time. There's a circle of life /"Cats in the Cradle" theme here: why did his parents break up? Why isn't Dad here anymore? The boy doesn't understand. "One day you'll understand; your mom and I can't live together. But I promise you: I'll come to your baseball games; we'll go fishing." Well-intended, broken promises. I never did understand why he wasn't there for me when I needed him: he never came to my birthday parties or graduation--he's on a business trip or whatever excuse; his calls and visits diminished through the years.  When I grow up and have my own kids, I'll be there for them.

Well, I wasn't there when my son was born; and then I ended up, too, having to divorce my son's mother, and I find myself making the same well-intended, never-kept promises. And I realize, despite my best efforts, he'll suffer the same broken heart, but I taught him well: big boys aren't supposed to cry.

By the way, this is my take on the song. I've never been blessed to be married and have my own children. I would hope to be a better man.

Miscellany: 10/27/11

Quote of the Day

The real voyage of discovery consists not in seeking new landscapes but in having new eyes.
Marcel Proust

Political Miscellany


Rick Perry To Skip Debates? Thumbs DOWN! Any regular reader of this blog knows I'm a proud native Texan; I graduated from a Texas high school and earned all 4 college degrees from Texas universities. We Texans don't back away from a fight; we don't start fights, but we finish them. That the Texas governor, with 11 years of gubernatorial experience, running the state with the strongest, most diversified economy, feels like he wants to avoid debates because he hasn't done well is absolutely inexcusable. How did he not know immigration would come up in the debate? Especially since he heads up one of the few states that share a southern border with Mexico? How did he not know that anti-immigrants would be suspicious of his policies--including an adversarial position on fence building (quoting Napolitano about being able to construct a ladder bigger than any wall), subsidized college tuition for certain foreign-born college-age students, etc.? Perry is not helping himself. I'm not sure he can salvage this run; trying to run a scorched-earth campaign against Romney is a political double-edged sword, and the damage could hurt his political future.

Some advice:

• Don't skip the debates. Viable candidates want to be in debates; voluntarily staying out of the debates is the equivalent of political suicide. A comeback story is pure Americana. The eventual nominee is going to have to take on Obama, whom argues in a sophistic, disingenuous manner, often trying to preempt and dismiss the opponent's arguments, making implicit, unsupported assumptions, etc. This is a guy whom pretended to be a centrist, trying to push his thin resume on a gullible American public with all the ethics of a used car salesman determined to dump his creampuff on some sucker.
• Attack Obama, not your fellow Republicans. Avoid petty bickering; people see it as mean-spirited, and they don't want to elect a mean-spirited President.
• Develop short talking points for all major issues. Depending on the specificity of a question it may be impossible to fit in a canned response. But like I've mentioned in past posts, Perry could have been talking about Obama cherry-picking which unauthorized aliens to deport, sanctuary cities, etc.
• Avoid straying from the script. For example, there was no way calling fellow conservatives "heartless" was going to end up well. Keep your message short, simple, positive, strong.

Romney: Time for a Campaign Tune-Up

• Keep it simple, stupid! Voters don't have patience to wade through Romney's nuanced positions. In particular, after supporting Gov. Kasich's pension reforms earlier, Romney seemed to waffle on support a few days ago for arcane reasons. HINT: if you spend a long time trying to explain something, it's probably the wrong message. The world may be complex, but part of what's being tested is the ability to filter the critical points.
• Avoid petty disputes, particularly in debates. No more Perry-style incidents.
• Be pithy, consistent, constructive and positive.

My Snarky Contribution to a Gretawire Poll

Yesterday's poll question was: "Should the State Department use tax dollars to buy the president's books to give away around the world?"

Let's provide the background story:

The U.S. State Department is defending its purchase of $79,000 worth of President Obama's best-selling books, telling reporters on Wednesday that it's not an unusual practice to provide books to distribute in diplomats' host countries. "It's the embassies themselves that make the decisions what American books to buy [out of their budgets]."

Here comes the predictable bureaucratic rationalization:

A senior State Department official told Fox News that books distributed by embassies have been used to engage audiences on U.S. foreign policy and its political system for decades. "Every embassy has a budget to buy books on US history, culture, politics for their own libraries and to give to host-country libraries and contacts," the official said

More serious commentary is to follow. I decided to publish a characteristically tongue-in-cheek comment with plays on words, etc. (Fans of my ad libs to late night jokes in my Political Humor feature won't be surprised.) As of this morning, I hadn't drawn a response or even a single 'like'. I've never liked the heavy-handed, one-sided, insulting humor of a David Letterman; I think of the major late night comics Jay Leno is easily the best, although Jimmy Fallon and Dennis Miller have their moments. I'm more of a word sculptor/humorist. Most comedians can't do a decent Obama joke (e.g., Letterman): I mean, how hard is it to make fun of a President whom is a little too full of himself and unduly defensive?

"I understand the concept that the State Department has to give away anything this President has to say, because few foreigners or Americans would buy anything he has to say. Of course, half.com has copies of Obama's biographies on sale for 75 cents each: I know what you're thinking. It IS overpriced at that. I wouldn't give 2 cents to hear anything he has to say, not even the narcissism of two autobiographies by his mid-40's."

More seriously, it isn't so much the magnitude of the expenditure--in the scheme of things, $79K is a drop in the bucket of $3.7T federal spending. But first of all, when 40 cents out of every federal spent dollar is borrowed, how in the world is it possible that expenditures for embassies or foreign gifts NOT one of those EASY DECISIONS on thing to have been put on hold indefinitely? NEVER MIND THE FACT THAT BOOKS BY OR OF BARACK OBAMA ARE THE DIPLOMATIC EQUIVALENT OF UNWANTED, PASSED-AROUND, DRIED-OUT CHRISTMAS FRUITCAKE!

Professional ethics requires that political leaders and government employees, bureaucrats/diplomats conduct their affairs based on intrinsic merit and not be influenced, in fact or appearance, by extraneous compensation in whatever form (money, gifts, meals, etc.)  In the many government contracting gigs I've had, there were strict codes regarding what you could give a client; even a baby shower gift to a federal employee on the same project was unacceptable. So when you read sophistic arguments by State Department public relations arguing effectively that embassies acted independently of senior management, that there was no direct pressure brought to bear: it doesn't matter. I don't care if Clinton or Bush post-Presidential volumes have also added to various libraries or may have served as gifts. The fact of the matter is that most of President Obama's income since his time as a Presidential candidate has come from his books, not his Presidential salary. Whether or not Obama has, directly or indirectly, promoted sales of his books by the federal government, the appearance of personal gain by someone with managerial authority over the government is clear.

This administration is notoriously thin-skinned and defensive. I don't want to hear the Obama Administration's typical finger-pointing: did embassies buy gifts during the Bush and earlier administration? Do I really have to say "if your friends told you to jump off a bridge, would you?" This is just a matter of common sense; keep in mind even if previous Presidents did similar things, Obama himself claimed that he was going to set a higher standard: where's the higher standard?

To raise an alternate scenario, it may very well be the case that in the past we have spent money on things on little luxuries. Or maybe the husband of a spendthrift housewife didn't object to an occasional shopping spree. But things change; you may have been able to afford an occasional dinner at a 5-star restaurant and you were pulling a six-figure salary; when you are unemployed, you teach yourself to cook. There's a big difference between a $100 spree with $10K available on a credit card and now the husband is looking for work and there's only $500 left on the credit card. Obama did not inherit a $14.8T national deficit--he is fully responsible for it; he inherited about $10.6T, nearly half in social security reserves.You just cannot spend money like usual. You have to treat every federal dollar like, "If my grandchild could see me spending her money on stuff like this, would she think I was putting her taxes to good use?" No, pruning $79K in book purchases is not going to close a $1.3T deficit, but it's a start--and freeze any future library or gift purchases until we get this deficit under control. Let the well-paid bureaucrats, American or foreign, go to half.com and put up the 75 cents from their own pockets to read Obama talking about himself (again). What is sad is the chutzpah of State Department PR personnel (now, they would be the first personnel I would fire) in trying to defend the indefensible....

A couple of final comments about gifts, beyond the ethics issues I've just discussed. First, given the fact that Obama's books have been so widely published and available, since when do they make for a good gift? I mean, if you went to an Italian restaurant, would you really order just spaghetti and meatballs? When I go out to eat, I prefer not to eat something I can make in 15 minutes at home...

Second, the fact that Obama's administration gives out ordinary, cheap, best-selling books as gifts is hardly surprising. Remember when the former British prime minister on a visit to the White House early in the Obama Presidency gave Obama a pen holder fashioned from a prominent British anti-slave ship, companion to a vessel whose wood was used to build a desk in the Oval Office since 1880? And a first edition of a prominent Churchill multi-volume set? And what did the President give the prime minister? A multi-volume American movie DVD set. That plays on American DVD players, not European ones. And given the deep recession at the time, the DVD set included such uplifting titles like Steinbeck's "The Grapes of Wrath"...

And don't me started on the personalized (video highlights of a past visit) iPod given to Queen Elizabeth. I've seen ludicrous rationalizations of this one, too. I mean, are we seriously going to believe the Queen of England can't afford her own iPod? But middle-class American kids have them? And she would be impressed by something requiring all the sophistication of a fourth grade school project? As John Stossel would say, "GIVE ME A BREAK!"

Political Humor. This is a periodic reminder you can find digests of late night jokes at show websites or websites like newsmax.

"Here in New York City, Halloween a little bit different. You get that knock at the door, you open it up, and there are four guys with masks." - David Letterman

[They were wearing the masks of Barack Obama, Joe Biden, Harry Reid, and Nancy Pelosi, collecting for the DNC-EF. Of course, behind them was Debbie Wasserman-Schultz, dressed up as the zombie Wicked Witch of the East Coast. A $20 donation is suggested, but they will accept smaller bills as a down payment. Just a caution: small children complain that the scary monsters want to see their piggy banks.]

"In an interview last night, Rick Perry criticized Mitt Romney for flip-flopping on the issues. Romney said that Perry has no idea what he’s talking about. Then he added, “But he does know what he’s talking about.” - Jimmy Fallon

[Rick Perry responded, "If Romney says that he would not hire young gardeners who have come into his state for no other reason than they've been brought there by no fault of their own, I don't think he has a heart. He needs to be hiring these children, because they will become a drag on our society."]

Musical Interlude: My Favorite Groups

CCR, "Have You Ever Seen Rain?" Oddly enough, the lowest ranking  (#8) of CCR's top 10 hits, it's my favorite CCR track (although 'Proud Mary' comes a close second).

Miscellany: 10/26/11

Quote of the Day

Nothing but heaven itself is better than a friend who is really a friend.
Plautus

AARP's Dishonorable Straw Man Commercial:
Overt Political Threat to Conservatives

For some odd reason, Fox News, among other media outlets, is playing a rather obnoxious AARP commercial; I did an Internet search to see if I could find any reference to the commercial and finally stumbled across a guest editorial CSM post from the chief economist, Diane Lim Rogers, of the nonpartisan Concord Coalition (thumbs UP!): "AARP's offensive new ad campaign".

Ms. Rogers' opinion begins:

I find this AARP ad campaign so offensive. They threaten policymakers with their 50 million votes if any of them dares to include reforms to Social Security or Medicare as part of longer-term deficit reduction.

[From the AARP website:]  AARP’s new national television ad tells lawmakers to cut waste and tax loopholes, not Social Security and Medicare. It urges lawmakers not to treat seniors like line items in a budget and lets them know that 50 million seniors are counting on them to protect their benefits.

Ms Rogers quotes former US Senator Bob Kerrey (D-NE): "AARP has taken an approach which can only and honestly be described as generational warfare." Director Robert Bixby adds: "[AARP] has chosen to be part of the problem by insisting that all sacrifices must be borne by someone else."

I want to make the following points: about 60% of the federal budget involves entitlement spending, particularly social security, Medicare and Medicaid. Over the last 3 fiscal years we have AVERAGED over $1.3T deficits, including entitlement spending: keep in mind that our annual revenues are just over $2T; we are spending 40% on the dollar we don't have. The first two programs focus on transfer payments to senior citizens (or their health providers), many of them whom certainly have contributed towards the program but don't need the benefits for a comfortable retirement.

First point: have progressive Democrats made unsustainable promises? Yes. What part of some $50T or so unfunded entitlement liabilities does AARP fail to grasp? Second point: will many, if not most, get benefits over and beyond what they and their employers paid into the system? Yes. We never properly funded these benefits properly from the get-go to accommodate the growing average tenure of retirement. Where does AARP think this gap gets funded by? The Treasury fairy? The next generation of beneficiaries, of course. It is the same principle behind any Ponzi scheme: to pay off generation zero, you skim from the investments of generation one. What do you think happens to the benefit payments of generation one, which got ripped off from generation zero? Even if they didn't get ripped off, would their own contributions be enough to sustain the rest of their lives? Probably not.

What is particularly obnoxious about this straw man argument is AARP KNOWS that entitlement spending is different from discretionary federal funding; entitlement spending is essentially on autopilot. If you thought the debt ceiling increase is hard, just ask how many American politicians have the balls to touch the third (electric) rail of American politics?

The Washington game of budget cuts is all about gimmicks--they do not discuss "real" baseline budget cuts (unlike me). They talk about reductions to planned INCREASES. It's not unlike the stereotypical spendthrift housewife whom assures her husband that she saved him money because all of the items were on sale. The husband is not impressed with how she got a $200 pair of shoes for $160; he doesn't understand why she's paying $160 for a pair of shoes when she already owns lots of shoes she rarely wears.

When we are looking at $1.3T deficits PER YEAR, and recent negotiations ended with a still higher budget this fiscal year and the super-committee is arguing over trimming the annual deficit by just over $100B per year, where in the world do you draw the conclusion if and when they take on budget cuts it, it will be in the face of a politically powerful special interest groups? OH, PLEASE. If and when I've heard of cuts, it's in terms of adjusting increases, phasing in higher retirement ages, etc.

The embedded video below is the product of AARP and is presented here solely for the convenience of blog readers and constitutes fair use. (Although they may disagree with my point of view, I somehow don't think AARP minds my presenting it here free: they're paying Fox News Channel to run it.) NOTE: This video was available as of post publication date. Some videos, like political ads, are temporal in nature and are subject to withdrawal without notice.



The Bill O'Reilly/Rick Perry Interview on 'The O'Reilly Factor'

Before proceeding, I have to comment about the bizarre Herman Cain web ad. I was going to publish a commentary on the GOP candidates, but there's just something about him that annoys me, like teacher's nails scraping against a blackboard. Since when does running a pizza business qualify a person to be President of the US--no lawmaking experience, no relevant competencies (e.g., defense and diplomacy), no public sector administration experience? So what do you get from a gimmicky 9-9-9 plan? Are we going to elect Presidents now because they come up with sales pitch like 'where's the beef?'?

I'm somewhat annoyed Krista Branch is letting Cain use her signature hit 'I Am America' which I've licensed for a download and promoted on this blog. I'm not sure how to take the commercial: we have this middle-aged white guy blowing cigarette smoke at the camera, and then a grinning black man, while the opposition has a black smoker blowing smoke at America, with a grinning white man (Joe Biden).

Rick Perry made an appearance on O'Reilly's show this week to promote his flat tax proposal. I'm puzzled listening to O'Reilly's segment about the interview with some people thinking Perry did well. No way! For me, Perry's performance was so bad--like his earlier debates, I don't see him winning the nomination. He had the equivalent of a Sarah Palin movement. O'Reilly had one question about funding, and Perry just ignored the substance. He had a distinct deer in the headlights moment. But--and I haven't checked all the conservative blogs to see if they caught O'Reilly's gaffe--but O'Reilly seemed to infer that Texas was a no-sales-tax state. Wrong! The last time I checked we had something like a 7 to 8%. But what's really weird is how Perry responds to this. He has to know Texas' sales tax is significant, but he doesn't quite admit it. It's almost as if he doesn't want O'Reilly's audience to know Texas has a sales tax.

O'Reilly's real motivation is because he FAVORS a small sales tax which he wants to dedicate to Medicare--plus he thinks it recaptures taxes for illegal businesses that don't pay tax.

This reminds me of Cain's proud  admission that he favors a sales tax, not a value-added tax. One point here: a value-added tax looks to most like a sales tax. A big advantage of the VAT: favorable treatment  for export goods.

Political Humor

"As you know, President Obama is here in Los Angeles He's raising money for a huge disaster relief project. It's called NBC." - Jay Leno

[It's for ongoing Democrat relief efforts following the 2010 mid-term elections: Obama lost his House.]

"Moammar Gadhafi was found hiding in a storm sewer with a gold-plated gun. That's me in retirement, ladies and gentlemen." - David Letterman

[Why did it take so long to find him? I thought that sewers were a natural habitat for rats...]

Musical Interlude: My Favorite Groups

CCR, "Lookin' Out My Back Door"

Miscellany: 10/25/11

Quote of the Day

It is a miracle that curiosity survives formal education.
Albert Einstein

Ginni Rametty: Big Blue's New CEO

Meg Whitman, former CEO of eBay and unsuccessful gubernatorial candidate last year, is the new CEO of HP, a leading computer company headed a few years earlier by Carly Fiorina. I am a contrarian when it comes to politically correct achievements.

But of all high technology companies (and one which I personally worked for in a previously acquired subsidiary), IBM is the unquestioned Blue Chip of the Blue Chips. One of my dissertation committee members is a research fellow there. I have referenced the work of IBM research scientists in my own usability articles. My computer programming career began as an APL programmer/analyst; APL was a rapid prototyping interpretive language that was developed for use by IBM in the 1960's.  I still recall my new employee orientation (as a DBA, not a programmer/analyst); they had a fairly secluded hotel/training complex in the New York woods several miles from the NYC airports. I have mixed feelings about my IBM experience which I won't discuss in this blog; let's just say IBM hires some very bright people like my former UH professor and myself, and then IBM hires (or inherits) other people I can't explain. For example, how can  you explain the fact that some otherwise rational people in the US thought that Obama is or was qualified to be POTUS?

Nevertheless, I am far more impressed that one of the most prestigious corporations in the world has hired a female executive to be its CEO than, say, the qualifications of Hillary Clinton, Sarah Palin or Michele Bachmann to be President. Congratulations, Ms. Rametty.

A Brief Rant Over Gimmicky Tax Plans

I've made it clear what I think is part of a sound tax policy: "everybody must be taxed"; we need to balance income with consumption taxes; taxes must be simpler and broader.

One of my pet peeves is how everyone pays lip service to politically correct tax policy: "oh, a sales tax is regressive: we'll simply exclude a number of items or provide an advance tax credit"; "we can't eliminate mortgage interest or charitable tax deductions"; etc.

Briefly: I am not impressed with the regressive argument: it is patently counterproductive to shield people from paying some level of taxes (in fact, they do implicitly as taxes get passed on via prices of goods, inflation, etc.). Why is it that people's fair share means zero cost for government goods and services, but they are expected to pay for their room and board, and other bills. I think the better argument is that the tax reform is not a zero-sum policy where, say, the rich shift their own burden to poor people.In fact, this is basically impossible given the aggregate income of poor people: in many cases, the tax payments made by the wealthy exceed total income of poor people. Equal protection at least to some point is a preferred policy.

Second, mortgage interest deductibility: why is this so special? Why are some consumption taxes more equal than others? Canada doesn't allow this... Mark Perry has a post pointing up to 95% of  all home mortgages today are either bought or guaranteed by the GSE's (Freddie Mac, Fannie Mae) or FHA, and American taxpayers are expected to spend over $200B on related charges. We need to get government out of the home mortgage industry.

We had today Rick Perry unbelievably suggest that taxpayers be able to choose which tax system they want to pay taxes under. under his cafeteria tax plan: oh, I wonder how this is going to play out. Maybe the 46% who do not pay any income tax under the current system will stick with the old system, whereas anyone who is at a higher tax bracket will of course choose his flat tax. GIVE ME A BREAK! The immediate conclusion is anyone would have to be an idiot not to choose the predictable choice--including figuring out your tax totals under either system.

Then Gingrich is trying to gain traction by lowering Perry's flat tax rates... All of these plans (including Cain's 9-9-9) are misleadingly similar, because you have all these special rules to minimize a regressive hit, etc.

Last year's Bowles-Simpson plan brought up things like simplifying tax rates, junking special interest tax gimmicks, etc.: it had a bipartisan commitment. Might I suggest instead of getting into a tax bidding war that the GOP candidates start by looking at a bipartisan agreement than President Obama has refused to acknowledge from the start?

Political Humor

"The guy who killed Gadhafi was wearing a New York Yankees cap at the time. So, for at least one Yankees fan, it turned out to be a pretty good October." - Jay Leno

[Qaddafi vehemently denied being leader of the Red Sox Nation.]

"A bank in Washington was robbed by two men in George W. Bush masks. Luckily, right afterwards two guys in President Obama masks came and bailed the bank out, so everything is fine." - Conan O'Brien

[The bank has been hit by a string of robberies. In fact, the bank security guards didn't even lift a finger the previous week when two men went to the counter and demanded the bank hand over all its cash. They said they were working for the IRS, and anyone resisting would be hit with an audit.] 

"Rick Perry is now saying he thinks that Barack Obama's birth certificate is fake. I think Perry may have faked his driver's license." - David Letterman

[No: Rick Perry is demanding that Obama produce birth certificates and/or immigration papers for the White House gardeners...]

Musical Interlude: My Favorite Groups

CCR,"Up Around the Bend". A PERFECT rock performance...