Tuesday, December 18, 2012

The Constitution, Deadbeat Dads, and the Hypocrisy of Obamacare

America is now poised to enjoy the fruits of what has been a demand from the left for over a quarter century: Government mandated socialized medicine.

There have always been three main arguments behind that drive:
1) Everyone has a right to free healthcare.
2) Fairness
3) We’re paying for it anyway.

As usual, the liberals miss the mark on all three fronts.

On the first they are wrong about what a right is. Our Constitution explicitly defines a number of rights… Speech, Religious liberty, Assembly etc. Most of the rights enumerated in the Constitution limit the government from impeding on a citizen’s free exercise of those rights. Other than the 6th and 7th Amendments’ right to a jury trial, nothing in these rights impose duties on others to provide anything. Rights are things you could take with you if you decided to move to a desert island somewhere where there was no one else there to provide them.

Healthcare is simply not a right. It is not free. It is not an infinite resource that can be redistributed endlessly. No, healthcare is a service that must be provided by individuals who willingly exchange their time and energy for whatever value someone else places on it. They do that so that they can in turn exchange that money with others for things like garbage services, car loans, dental floss, chocolate, gasoline, video games and a wide variety of goods and services for which they are either not interested in or not capable of providing for themselves. That alone distinguishes healthcare from a right.

The right to free healthcare is nowhere to be found in the Constitution. Indeed, none other than the patron saint of progressives, community activist Barack Obama recognized as much: “…the Constitution is a charter of negative liberties. Says what the states can’t do to you. Says what the Federal government can’t do to you, but doesn’t say what the Federal government or State government must do on your behalf…” Too bad President Barack Obama forgot as much.

The left also has it wrong on the notion of fairness. Fairness is a value judgment, not a logical basis upon which to distribute a finite resource. Fairness is relative to the person making the judgment. History, both ancient and near, is full of stories of people fighting over land and property they feel is rightfully, fairly, theirs. Fair depends on perspective.

What’s more, life is simply not “fair”. Some people are tall, while others are short. Some are kind while others make the Grinch look like Ghandi. Some are skinny, others are fat while a few look like Adonis or Aphrodite. More importantly, some work hard while others seek to live off of the efforts of others. Those differences have existed throughout history and will continue to do so as long as we remain human. As such, there is simply no way to ensure “fairness” because everyone has a different understanding of the word. We see this demonstrated every day. Liberals think it’s fair to take half or more of what someone earns to give to others while those whose sweat or intelligence generate wealth think they should be able to keep it.

Finally, those demanding universal healthcare are hypocrites as well. Not sure? Ask them about the following. They claim that the government should provide healthcare to everyone because we’re paying for it anyway when people who can’t pay go to emergency rooms and the rest of America has to pay extra to cover them. If that logic works, how about extending it to unwed mothers and deadbeat fathers? Unwed mothers are a disproportionately large segment of those living in poverty and receiving welfare. We’re paying for that. Americans have spent trillions of dollars on poverty programs over the last half century; indeed the acronym AFDC stands for Aid For Dependent Children… for which a family was ineligible if a father was present. As such, is it appropriate to forcibly tie the tubes of women who have children they cannot support until such time as they get married or can support the children on their own rather than making the rest of society pay for them?

Similarly we all pay for the police who capture criminals as well as the courts that try them and the prisons to lock them up. Does the progressive logic hold then that since men who grow up without fathers present are disproportionately represented amongst the criminal element, that we should forcibly give men who refuse to raise or support their progeny vasectomies? While someone who cannot afford hypertension medicine or the cost of an ankle cast may be poignant, is it more calamitous than a parent suffering the loss of a son or daughter murdered by a criminal who grew up without a father? If government can seek to ameliorate the former by edict, why not apply that logic to eliminate the second?

At the end of the day, President Obama and his liberal cabal have it wrong on healthcare, as they usually do on virtually every other issue they harness to redistribute wealth and turn the country into a statist Nirvana. From misunderstanding fundamental concepts in the Constitution to ignoring the basic nature of mankind to crafting irrational, self serving arguments, they seek any route available to impose their fatuous, untenable programs on an uninformed public, knowing that once in place they will live on forever.

President Obama is certainly on his way to achieving his goal of “fundamentally transforming America”. One can only wonder as the true nature of Obamacare plays itself out over the next five years and its mandates begin to crush the vitality out of the American spirit, whether citizens might look to something other than the Constitution to save freedom. There is another American document to which they might want to turn. Its first line reads as follows: When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation. The catastrophe of Obamacare just might be at the top of the list.

Sunday, December 9, 2012

President Obama's deleterious effect on America's work ethic.

The United States was built on the backs of hard working people. From pilgrims who survived an ocean’s journey and founded a colony at Plymouth to slaves who endured the blistering sun as they harvested cotton to settlers who braved temperatures, terrain and Indians to fulfill a Manifest Destiny, the United States was the product of people who worked like their lives depended on it. And in many cases, they did. In the 20th century however, other than a number of wars, and increasingly, simply living in intercity neighborhoods, most aspects of working in America don’t involve putting your life on the line in order to survive.

Today, America is still powered by work, in whatever form it takes, everything from building bridges to creating smartphone apps to finding investment opportunities. Work has created a foundation for the prosperity that has given the United States two centuries of greatness. Unfortunately, the very concept of work as something positive, something necessary, something that is part of a normal family’s existence, is slowly going away… and it’s no accident.

One wonders what someone could do to destroy the work ethic…

For starters, try two full years of unemployment benefits… although the longest period today has dropped to 83 weeks – a year and a half – President Obama had benefits up to an unprecedented 99 weeks in his first year in office. This, despite the fact that studies show that fully 1/3 of those receiving unemployment benefits find a job within one week of their benefits expiring, and a sizable number of the rest soon thereafter. This is not just an exercise in navel gazing… it has a real impact. In Fort Wayne, Indiana, despite offering between $9 and $20 per hour and a 7% unemployment rate, hundreds of employers cannot fill their open positions. Either they can’t find enough qualified applicants (thank you teachers’ unions) or the pay they are offering is simply not good enough to convince people to give up their unemployment benefits.

And unemployment benefits are not the only government program weighing on the work ethic. Then there is welfare. The GOP half of the Senate Budget Committee released a report last week that was astonishing: “Welfare spending per day per household in poverty is $168, which is higher than the $137 median US income per day.” To put that in perspective, those welfare benefits, including food stamps, housing, healthcare and child care amongst other programs, equal to $61,320 per year per household in poverty. That compares to the median US household income of $50,054 per year. And to add insult to injury, that $50,054 is taxable while the welfare benefits are not. A conservative 20% combined federal, state and local tax rate would bring that take home pay to approximately $40,000, fully 35% lower than the income from the household living in “poverty”.

Now of course liberals say that these numbers are skewed and that all those benefits don’t go to people living in poverty, but also go to people who are experiencing particular hardships. Perhaps, but isn’t that exactly what unemployment insurance is for? Should welfare benefits really be going to those who are not living in poverty? And of course, don’t forget, poverty in 2012 doesn’t mean what you might expect.

Then there is this nugget from the Bureau of Labor Statistics: While the economy has created 2.6 million jobs since June 2009, fully 3.1 million workers signed up for disability benefits. There is something staggering about the fact that for every one person who found a job in the last three years, there was another person who not only didn’t help grow the economy, but who sought support provided by people with jobs! It’s like you and a stranger going to apply for a job. You get the job and the stranger says he can’t actually work but wants to be paid out of your salary… You might not be surprised to learn that lax enforcement and fraud are part of the mix.

Finally there is this. It’s called the Labor Force Participation Rate. Essentially it’s the percentage of people 16 years of age and older who are either working or looking for work. (Those not in that number include students, retirees, those unable to work and those not looking for work.) For most of the last 20 years that number has been between 66% & 67%. Since President Obama took office that number has plummeted to 63.6%. That is the lowest level in over three decades. Fundamentally, what that means is that since President Obama was sworn in, fully 2.2% of the adult population of the United States has decided to exit the workforce. (Remember, that doesn’t include those who are looking for work…) That works out to be approximately 5 million people who have decided that they can get by one way or another without working… which means of course that someone else has to pay to support them.

Taken together these data are nothing less than catastrophic. A country that was built on sweat, ingenuity and perseverance is today foundering under the sheer weight of a segment of the population that sees either no need or no point in contributing to the prosperity of the nation. It’s no wonder that the economy is stagnating despite the infusion of over $5 trillion in debt over the last four years.

This is Margret Thatcher’s “The problem with socialism is that you eventually run out of other people's money” playing itself out in real life. Today we have fewer and fewer people getting jobs while we have skyrocketing numbers of people living off of government handouts. Unfortunately, a majority of voters just reelected a man who not only doesn’t see a problem with this, but who has been driving it. What’s worse, he’s using tax and regulatory policy to dissuade investors, entrepreneurs and businessmen from starting or growing the businesses whose jobs are supposed to support this lunacy in the first place. And of course forgotten in all of this is that work, in addition to providing a person with an income, also provides a feeling of dignity, independence and the pride in the fact that they are benefiting not only themselves but the society as a whole.  One has to wonder, when 2016 comes around will there be enough Americans left with jobs (or the memory of jobs) to derail this progressive train to oblivion?

Monday, November 26, 2012

Maybe it’s time to drop the picket signs and pick up a copy of The Road to Serfdom

It was with great interest that I watched Facebook catch fire with support of the calls for picketing and sick-outs at Wal-Mart stores across the country on Black Friday. From what I could tell, most of those supporting the calls were liberals who attacked the company with claims that it doesn’t pay “a living wage”, “exploits” its workers, or owes its workers health care. I even saw one fantastical claim that a majority of Wal-Mart employees are on food stamps. The suggestion was that Wal-Mart should be forced (via government itself or indirectly via unions) to change completely how it deals with its employees in terms of salary and benefits.

To set the record straight, according to Business Insider, Wal-Mart pays its workers an average of $11.75 per hour, just slightly below retail’s national average of $12.04 and well above the federal minimum wage of $7.25. The company itself states that the average non-manager employee earns between $10 & $12 per hour.

Those wages are at least sufficient to make Wal-Mart the largest employer in the country, with a current headcount of over 1.4 million employees. And no one forced those employees to take those jobs. One of the beauties of freedom is that employees are free to work at Wal-Mart or they can take their labor and sell it to someone else… or better yet, they could start their own businesses.

I couldn’t help but think back to the nonsensical Occupy Wall Street protests of a year ago. Many of the participants were carrying around signs decrying Wall Street for its profit mongering and the harm big businesses were inflicting on small businesses and the little guy. Of course their solution of choice was more regulation. Naturally.

Both of these instances reveal more about the protesters than it does about the companies being pilloried. The very regulations they seek are one of the reasons big businesses are so successful verses small businesses in the first place.

It’s a simple example of liberals either not knowing or ignoring basic economics. Take economies of scale. One of its benefits is that you can spread fixed costs out over a larger volume. It works for rent as well as for regulations. Let’s imagine there are two widget stores operating next to one another with identical rents of $10,000 per month. With everything else being equal, the store selling 2,000 widgets a month can build a $5 cost per widget into his prices, whereas the store selling only 1,000 widgets per month has to build in a rent cost of $10 per widget. As such, the store selling more widgets will likely be more profitable, successful and eventually may be able to buy out the second widget store and start its journey to becoming a hated big business.

The same holds true for regulations. Frequently large businesses not only influence regulations to their benefit, but they can also absorb the costs of such regulations far more easily than can their smaller brethren, even if they were unable to influence their writing. Take the tax code for example. At 75,000 pages, a five billion dollar company can easily afford to hire a phalanx of lawyers to find ways to reduce its taxes or lobby for changes. Such luxuries are rarely feasible for small businesses.

According to the Small Business Administration, big businesses with more than 500 employees pay about $7,755 per employee to comply with federal rules each year, while small businesses with fewer than 20 employees pay $10,585 per employee. That is almost 50% more that small businesses have to pay per employee than do large businesses. All because of regulation.

This push for regulation is simply another example of the left using the cover of populism to disguise its real agenda: more government control over business. Whether using the fig leaf of environmentalism to further the nonsensical, inflation causing ethanol mandates or the lie of “the rich don’t pay their fair share” to push for higher taxes, the left rarely lets facts get in the way of their pursuit of a socialist, statist agenda.

Which brings us back to the Wal-Mart protests of Black Friday. The real goal of liberals is not to improve the lot of Wal-Mart employees, it’s control of the company via unions and their government enablers. In doing so they would be able to use government regulations to not only take money out of the pockets of Wal-Mart workers, but more ominously, they could harness the power of the NLRB to impose a wide range of costs, controls and dictates on the company.

To put a cherry on top, take Wal-Mart’s misguided and calculating support of Obamacare – calculating that it would impose greater costs on its small competitors – that has now resulted in the company itself dropping healthcare coverage for many employees while drastically raising the premium costs for others. By pushing such utopian, economically illiterate regulations as Obamacare, the Community Reinvestment Act, ethanol mandates and higher taxes for the rich, liberals not only fail in their stated objectives, but they also invite a wide range of unintended consequences, none of which ever seem to be good. Maybe it’s time to drop the picket signs and pick up a copy of The Road to Serfdom.

Monday, November 19, 2012

The Fiscal Cliff gives the GOP an opportunity to engage in a battle for the future of the country.

Two weeks ago a slight majority of Americans voted for more stuff from the government. There may have been other drivers, but that is the main one. Below is a quote whose origin is disputed, but it is particularly apropos:
A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.
Although the United States is a republic, it is a democratic republic, and the author’s point applies in spades. The question is however, are we too far gone? Are we past the tipping point beyond which there is nothing but a descent into just another failed state that devolves into a third world dictatorship?

While I think we’re close, I’m not sure we’re quite there yet. There is hope, just not much.

Which brings us to the so called, Fiscal Cliff. The Fiscal Cliff is primarily the convergence of the expiration of the Bush tax cuts with sequestration – mandated cuts in government spending – both of which are supposed to occur in January. It is widely assumed that if the President and Congress do not come to some grand bargain, the economy will fall back into recession.

The key issue dividing the parties is the tax cuts. President wants to raise tax rates on the, because he absurdly suggests they are not paying their fair share. The GOP, as long as their spines hold, want keep the lower tax rates for everyone.

Many people suggest the president doesn’t want to avoid the Fiscal Cliff. The suggestion is that he wants to demonize Republicans for throwing the country back into recession. He does.

That does not however mean that the GOP should capitulate in order to avoid it. On the contrary, this battle could and should begin the fight for, not only the White House in 2016, but more importantly, for the future of the nation.

Bobby Jindal was right about Mitt Romney’s comments, if the GOP seeks to survive as a party, it’s going to have to appeal to 100% of the people. And what better time to do so than when the country laser focused on this “Fiscal Cliff”? While the mainstream media would act as little more than a mouthpiece for the administration, the reality is, that’s the world we live in and if the GOP can’t figure out how to get its message out now, it never will.

Rush Limbaugh and Mitt Romney were also right, the President tried to buy voters with gifts. Interestingly however, despite his massive redistribution program, 9 million fewer people came out to vote for him than did 4 years earlier. Despite those efforts, the real reason Mitt Romney was not Obama’s printing of money and food stamps. Romney lost was because he failed to articulate a compelling economic message to inspire not only those 9 million ex Obama voters, but the 2 million voters who supported John McCain but chose not to come out and vote for Romney…

The truth of the matter is, this fight is for far more than just a Fiscal Cliff. The Fiscal Cliff is simply the first battle in the war between statism and freedom that will play itself out over the next four years. This is a revolutionary war of ideas. Whether it was Tytler or Tocqueville who wrote the above passage, they were prescient. We are very near that point beyond which there will be no return. At some point the tax burden simply becomes too much, the regulations become too numerous and restrictive and the opportunities for success become too few. As a result, those who might otherwise become entrepreneurs, investors, job creators decide to stop being productive and simply spend their time and energy elsewhere, gravitating perhaps to becoming a cog in the government machine or abandoning the country altogether as they pursue better opportunities elsewhere.

At that point the list of the ship of state will beyond recovery and the only outcome will be its quick sinking into the lifeless depths where little freedom, economic or otherwise, can survive.

The challenge for the GOP is whether it can muster the courage to engage in the battle of ideas and articulate a vision that appeals to 100% of the population. Of course there’s no way that 100% of the population will respond, but the message itself has to be clear: We reject the notion of identity politics; we reject the idea that the government is responsible for our success and happiness; that every American individual, family and organization should be free to succeed or fail on their own merits, without government assistance nor government hindrance. And if they fail, they should have the opportunity and motivation to pick themselves up and start once again.

Given the opportunity for failure that freedom accords, many citizens will choose instead to support the cradle to grave security that government promises – but rarely delivers.

Nonetheless, the message that every American should hear is that the GOP seeks a nation where every citizen can determine their own fate; where neither race nor sex limits their opportunities; where economic status at birth does not dictate economic status throughout life; that every man, woman and child has the freedom to stake their claim to their piece of the American Dream.

In addition to the overarching message of freedom, the GOP should use sunshine to expose the Democrats (as well as some big government GOP types) as the tax and waste charlatans they are. Between now and the 2016 election there are approximately 1,500 days. The GOP should select a different government boondoggle to highlight every single day one of those days. Sure the mainstream media will ignore them, but that doesn’t mean they can’t get the message out. If the GOP has to rely on the mainstream media to win their fights, they might as well throw in the towel right now.

The truth is, this is a war that would have had to have been fought even if Mitt Romney had won the election. Statism and socialism simply don’t work, and there is a century of proof available to anyone who is willing to see it. From the fascist regimes in the 20’s and 30’s to the Communist regimes of the last half of the 20th century to the chaos of the Arab world and post-colonial Africa to the crumbling Europe we see today, the result of the lack of freedom is always the same: Failure.

The GOP should go to the mattresses in this fight. They should stand their ground or let the consequences play themselves out. And they should hang the resulting recession and unemployment squarely on the backs of President Obama and the rest of the Democrat cabal. Let liberalism be exposed for the failure that it is. If they can’t figure out how to compellingly explain and defend free enterprise and limited government against an administration and party filled with statists and socialists they are destined to fail and should exit stage left once and for all and give a someone else an opportunity to save the nation.

Thursday, November 8, 2012

When America needed a leader, Romney was a manager

As one who writes about everything political, one of the downsides of living in a state that is utterly unimportant from the Electoral College perspective is the fact that you’re insulated from much of the advertising campaigns that ravaged the battleground states. (From the perspective of a normal person however, that would likely be a blessing…)

I had friends who complained about not being able to get through an evening meal without getting robocalls. Others told of more campaign commercials than actual programming. I on the other hand saw one Barack Obama commercial during a nationally televised football game on Sunday and two Mitt Romney commercials the week before. Other than that, nada, the entire campaign.

That insulation from the billion dollar barrage skewed my perspective, at least as it relates to how the rest of the country was seeing this election. As a result, my prediction that Mitt Romney was going to win by double digits was… slightly off. I suggested that the polls were far from accurate for a variety of reasons from race to enthusiasm to undecided voters. By 8 PM on Tuesday it became clear I was lucky I had not bet my house on my prediction. I was wrong on every single point.

So how did I and so many others get it so wrong?

Maybe it was believing the hype about the effectiveness of the big dollars that drove the advertising I never saw. Romney did spend a lot, but it was money poorly spent. Why? Because he and his supporters outspent the Obama team across the board: In Ohio $97 million went to support Mitt while $90 went to support Barack Obama. In Virginia the numbers were $73 million vs. $65 million while in Florida they were $100 million vs. $78 million. And what did he get for all of that? Nothing. He needed those states and he lost all three.

Maybe it was ground game. This is art of getting your supporters to the polls but it’s often hard to see beforehand. And it’s particularly important in union stronghold states like Ohio, Pennsylvania, Wisconsin and Nevada, states Romney thought he would or at least could win. In all four Romney exceeded McCain’s 2008 totals, while the president underperformed his. It wasn’t enough. In a year where the enthusiasm gap was widely expected to favor the challenger the GOP failed in the closest thing to basic blocking and tackling, getting supporters to the polls.

Then there was Hurricane Sandy. As expected, turnout was down in reliably blue New York and New Jersey. The real impact, unforeseen by me however, was far beyond the storm. It was in the rest of the country where they were reading about it. Sandy did three things. One, she stunted Romney’s ascent and took him off the front page. Two, she kicked Benghazi to the back burner. Three, she gave the media a much desired backdrop upon which to project a very presidential Barack Obama.

These combined to help Mitt Romney lose the presidency. They do not however explain the surprise. That was something all together different: Enthusiasm. I for one expected GOP enthusiasm to be off the charts. It wasn’t. After four years of Barack Obama’s socialist policies one would have expected conservatives, Tea Party types, libertarians and Republicans to head to the polling stations with pitchforks and torches and ready to throw out anyone dressed in blue. Surprisingly, they did not. Indeed, Romney was not even able to get the same number of votes McCain did. Romney received two million fewer votes, despite having the worst economic recovery in a century and four years of progressivism against which to campaign.

At the end of the day, Mitt Romney lost because he did not sufficiently articulate why Americans should go out and vote for him. He is a good and decent man and he attracted 49% of the vote. But elections are about winning. A nation doesn’t need a manager who says “Vote for me because I’ll do a better job than that guy”, it needs a leader who says “Vote for me because I’ll do this and I won’t do that”. Barack Obama left Christopher Stevens as a sitting duck and in the end he and three other Americans died. Americans barely heard a peep about that from Mitt Romney. Barack Obama and Eric Holder have the blood of hundreds of Mexicans and at least one American Border Patrol agent on their hands; again, crickets from Mitt Romney.

Millions of illegal immigrants cross into the country each year and Mitt Romney talked about “self deportation”. Obamacare is destroying jobs while the IRS is arming to enforce its mandates and Mitt Romney equivocated. The tax code costs Americans half a trillion dollars a year and restrains the creation of millions of jobs and Mitt Romney promises to fiddle with some opaque “middle class tax cuts”.

In 1964 Barry Goldwater said “Extremism in the defense of liberty is no vice”. In 2012 that was not a problem. Today’s adage might be “Milquetoast in the defense of liberty is no defense at all”. At a moment in time when Americans needed a man to arouse them and lead them out of the thickening forest of liberalism they instead got a man who wanted to discuss how to prune some low hanging branches. It should have been no surprise they chose to stick with Johnny Appleseed.

Saturday, November 3, 2012

Despite what the polls say, Mitt Romney will win by double digits... here's why

2012 will not be a reprise of 2000. Although Barack Obama is building an army / phalanx of lawyers to try and redirect the election to the courts with the hope that the justices will lean against throwing out a sitting president, it won’t happen. 2000 only happened because the election was so close, with a mere half percent difference between the candidates. In 2012 that will not be a problem. Of course that was all about electoral votes, not popular, but the two usually go hand in hand. Michael Barone does a good job of looking at the electoral landscape. I’m looking at the popular vote.

Mitt Romney will not only beat Barack Obama, he will do it by double digits. Why, when the polls are so close will the election itself be so lopsided? Here are four reasons.

1. Race: I won’t suggest that it doesn’t have anything to do with race. It does, but not in the way you might think. In 2008, 95% of blacks voted for Barack Obama while 4% voted for John McCain. At the same time, 43% of white voters cast their ballot for Obama, a higher percentage than voted for Bill Clinton in 1992. So it’s obviously not that white people won’t vote for a black man. No, race won’t matter in the election, but it does in the misdirection provided by the polls. It’s called the Wilder effect or the Bradley effect. Named after former Virginia governor Doug Wilder and the late Los Angeles mayor Tom Bradley, both of whom won election with a lower proportion of the white vote than had been predicted. (Actually, Richard over at Flopping Aces accurately pointed out that Bradley actually lost in 1982.)

This year that effect will be dramatic. Not because whites won’t vote for a black man, but rather because after spending the last four years watching every disagreement with the President labeled as racist, many whites will not tell pollsters they are voting against Barack Obama for fear of being labeled a racist. The result will be that the white vote against the President will likely be 5-8% higher than is reflected in the polls. Good for 3% in the general election.

2. Enthusiasm: The overwhelming majority of polls that have been run over this election cycle have greatly oversampled Democrats while simultaneously undersampling Republicans. This is particularly important in polls in electoral swing states like Virginia, Ohio and Florida. Pollsters have continuously utilized a 2008 voter turnout model to suggest what the 2012 turnout will look like. That makes no sense whatsoever. In 2008 Democrats were frothing with their hate for George Bush and were excited about the possibility of electing the first black president. They desperately wanted a change from the status quo (i.e. McCain = Bush) and were highly enthusiastic about voting for Barack Obama. You could have put 10 ft barbed wire fences around the polling stations and Democrats would have found a way to vote. Today, after four years of abject failure on virtually every level, Democrats still want to vote for Obama, but the passion is gone. They may still support him, but the willingness to climb a mountain or wrestle a bear just to vote for him is gone.

Contrast that with the Republicans. In 2008 many of them were very unhappy with the GOP’s decidedly un-conservative, milquetoast candidate. As a result, while most wanted nothing to do with Barack Obama, many simply decided to sit the election out altogether. Today, after four years of failure and a steady march towards socialism, Republicans in general and conservatives in particular are the ones frothing, this time to depose a socialist king. They feel as if the country is on the line. Many, if not most, feel that the Republic can simply not survive another four years of Barack Obama. When people’s backs are against the wall, they fight far more passionately than they might otherwise. The result will be a GOP turnout that far exceeds what most pollsters are suggesting. This will be good for 4% at the polling place.

3. Hurricane Sandy: The aftermath of hurricane Sandy will not be good for Barack Obama. Even if the press were successful in painting him as the un-Bush it wouldn’t really matter. The scenes on TV are heartbreaking and there’s no way for Obama to benefit from such a tragedy. He will still win New York, New Jersey, Connecticut and Maryland, the states most deeply affected by the storm. His popular vote however will suffer. Whatever the number of people who don’t vote in those states, be it a million or two, 65% of them would have been Obama voters. As a result, in terms of the popular vote Obama will lose proportionally far more votes as a result of hurricane Sandy than Mitt Romney will. The impact will be about 1% of the popular vote.

4. Undecided voters: Finally there is the undecided voter. Although I have no idea how someone could be undecided in this election, most polls put the undecided vote at somewhere in the ballpark of 3% - 4% of the electorate. Mitt Romney is likely going to get 75% of that vote. One might think that the undecided would play out at 50 – 50 or maybe 55 – 45 one way or another. Probably not. Dick Morris was spot on when he compared it to asking the question “Do you plan to be married to your wife next year? If you’re undecided, you’re already halfway out the door.” When undecided voters step into the voting booth they will basically be choosing between “More of the same” and “Something else”. When they are standing there I would posit there are four things that will be on their minds – the economy, Libya, Fast and Furious and Mitt Romney’s debate performance. First and foremost the economy will take up about 85% of their mindshare. That’s not good for Barack Obama in any way shape or form. To the degree that undecided voters venture beyond the economy, my guess is that Benghazi and F&F will pop into their minds. Why? Because in an ambiguous universe where a leviathan government is involved in everything but no one is responsible for anything, these two events provide a crystal clear and deadly example of the incompetence and mendacity of Barack Obama and his administration. And despite the mainstream media’s attempts to shield the administration, the story has gotten out. Lastly, undecided voters will remember their surprise when they discovered during the debates that Mitt Romney was not the Gordon Gekko caricature the Democrats had said he was. If nothing else, he seemed competent, earnest and well prepared, something Obama clearly was not. Suddenly they could see him as president. They will come down squarely in Mitt Romney’s corner and that will translate into 3% of the vote.

There are of course other significant aspects of this race such as ground game and commercials, but at the end of the day it matters who is willing to take the time to actually get to the polling place and what they do when they get there. The privacy of the voting booth is the one place where voters can make their choice without having to worry about what anyone else thinks or says, and where they can cast their vote for the kind of future they want.

On Tuesday a beleaguered nation will take to the voting booths. They may not know exactly what they future holds, but they know they’ve had enough of what we have. When the dust settles they will have given Mitt Romney a resounding mandate for change.

Monday, October 29, 2012

Mitt Romney will have to do more than play Ronald Reagan to Barack Obama's Jimmy Carter

Sadly, this summer Andy Griffith died. Growing up in the 1970’s, watching the Andy Griffith show was simply part of our day. Between episodes of Howdy Doody, The Brady Bunch and Gilligan’s Island, the Andy Griffith Show was just another show where life lessons played out on TV. Together these shows were “Americana” incarnate, where stories about honesty, hard work and community were on display daily.

My wife, who was born and raised in France, recently stumbled across Andy Griffith reruns and decided to record them. She finds them quite entertaining and I’m happy to watch them with her as I find great pleasure in explaining the subtleties of life in the United States that one might not pick up if they did not grow up here.

I often find myself thinking about the 1970’s in a very nostalgic way, which is probably not unusual for anyone who spent their early teens growing up then. Of course from the perspective of an adult the memories of the 1970’s are probably a bit less sanguine. New York City almost went bankrupt in 1975, went black in 1977 and its stories of the Son of Sam and the killing of John Lennon shocked the nation. And things weren’t much better in the rest of the country with lines at gas stations winding around city blocks, labor unrest rampant, and smokestack industries choking… the United States was an economic basket case. By the end of the decade the misery index was at a record high (inflation + unemployment) and interest rates were sitting at 15%. To put a bow on it, the decade ended with Love Canal, Three Mile Island, a coming Ice Age and 52 American hostages in Iran scaring Americans into thinking the world was coming apart at the seams. Things looked dark indeed.

Thankfully, in 1980 Americans threw out the dour and clueless Jimmy Carter after he scolded them the year before:
In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we've discovered that owning things and consuming things does not satisfy our longing for meaning....

I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel....
Carter was right about part of that… for most of the United States’ history Americans have indeed been proud of hard work, strong families and close-knit communities. And a belief in God too. Fundamentally they felt that, in America, anything and everything was possible. Anyone, regardless of their background, could be successful, or could at least work hard and set their children up for success. Why? Because America was, well… free.

In 1981 Ronald Reagan rode in on a white horse and saved the country. More than the tax cuts, more than his building up the military and the breaking the Soviet Union, more than shrinking the rest of government, Reagan made Americans believe again that they could succeed, that they could once again find prosperity and they could once again live in the Shining city on a hill to which he so often referred. Fast forward 30 years and the United States finds itself in a similarly dire situation where the economy is in the midst of an economic malaise, a befuddled president is clueless as to how to successfully direct the nation out of its storms, either domestic or foreign, and a wide swath of the nation feels like the country’s best days may indeed be behind it.

The question is, can Mitt Romney reprise the roll of Ronald Reagan to Barack Obama’s Jimmy Carter? Maybe, but in all reality, Mitt Romney will have to do far more than was ever asked of Ronald Reagan.

Why? Because the borg of government has made success so much more difficult. In 1981 the world was a different place. The EPA had only been in existence for a decade and its budget was $3 billion. Today the EPA has metastasized into a $10 billion octopus that is far more aggressive as it seeks to extend its tentacles to virtually every aspect of the economy from spilled milk to broken light bulbs to the carbon dioxide we exhale. In 1981 our national debt was 35% of GDP and while today it approaches a staggering 110%. In 1981 the federal Department of Education was a mere two years old and played almost no role in education while today it’s a $150 billion a year leviathan that infects schools across the country.

In what is perhaps the most telling illustration of a government out of control, take a look at the laws themselves. In 1981, after 194 years of the Republic, the Code of Federal Regulations (the complete list of federal regulations) was approximately 80,000 pages long. Today, a mere 31 years later Code has more than doubled to 170,000 pages! Every one of those pages, be they focused on employment, school lunches, banking, TV advertising or toys, makes it far more difficult for the nation to pull itself up off of the ground, dust itself off and continue the march to prosperity.

Unfortunately, it’s not just the federal government. States and local governments have grown similarly oppressive, with their obscene union contracts, which land on the shoulders of taxpayers, their onerous regulatory environments, and their abject failure in education combining to handicap Americans in the fight to regain their economic footing. The tentacles of these local leviathans show themselves every day in stories about children’s lemonade stands being shut down, people being arrested for cutting hair illegally, or more painfully, in the students who leave schools poorly equipped to face the challenges ahead.

For most of the country’s history the United States has been one of the freest nations in the world. It was that freedom that helped the United States rescue the world from two world wars, win a Cold War, invent everything from the mechanical reaper to sliced bread to silicon chips, and revolutionize industries from automobiles to spaceships and everything in between. In short, the United States has been the economic engine driving the world’s prosperity for a century. For most of the 80’s the United States was generally considered the third freest country in the world, behind Singapore and Hong Kong. Today, the Frasier Institute ranks it 18, not only behind Hong Kong and Singapore, but also behind such bastions of freedom as Bahrain, the United Arab Emirates, Finland, Chile, Estonia and Denmark.

It was a different world indeed. In 1981 Americans were sufficiently free to shake off the body blows of progressivism and resume that march towards prosperity. By 1984 Ronald Reagan had the economy growing by 7% a year. Today? After experiencing a far less severe recession, Barack Obama has the US economy growing by less than 2% a year. To put that in perspective, growing at 7% a year, it would take you a little over 10 years to double your income. At 2% a year it would take you 36 years. Now expand that to the national economy and you see the difference freedom makes.

The country is certainly a different place than it was when Andy Griffith was keeping the streets of Mayberry safe from pick pockets or settling disputes between feuding clans. It’s also a different place from the one Ronald Reagan inherited in 1981. While Americans may no longer be tethered to a telephone hanging on the wall or stuck getting their news or entertainment from a newspaper or television, those new freedoms and choices pale in comparison to the freedoms and choices lost in terms of their own economic opportunities. At the end of the day it’s great that you can get the latest football scores or watch YouTube videos on your iPhone, but at the same time it’s far more difficult to start a business to pay for it or keep a job to pay for the house you live in.

In order to help lead the country out of the economic abyss that Barack Obama and a quarter century of progressivism has plunged us into, Mitt Romney will not only have to be Ronald Reagan, he will have to be something more as well. He will not only have to reawaken the American spirit of possibilities, he must play the role of Alexander in the face of the Gordian Knot of government regulations. If he can accomplish those twin tasks by the end of his first term, his reelection campaign should be a simple one: “Are you better off today than you were four years ago?” A successful Mitt Romney should be able to hear a resounding, enthusiastic, unambiguous yes from everywhere in the country, including the little town Andy Griffith based Mayberry on, Mount Airy, North Carolina.

Monday, October 22, 2012

How about letting members of the Fortune 500 run America's welfare programs?

Imagine what you could do with a quarter of a trillion dollars. You might buy a new house, maybe a new car and maybe even take a trip to Hawaii or Australia. Nice.

Seriously, what can $750 billion accomplish? Well, that all depends on who’s spending the money.

According to the Congressional Research Service the federal government spent $745 billion in 2011 on welfare payments.

That means that government took 20% of every dollar it extracted from citizen’s wallets (or borrowed on their behalf) and gave it to somebody else. Not in exchange for part of a system they have paid into like Social Security or Medicare, or earned such as veteran’s benefits, but simply because they, the recipients were deemed poor. What’s more, virtually every element of the welfare state has gone up by double digits over the last 3 years: Healthcare up 37%, cash aid up 12%, education (college) assistance up 57%, energy assistance up 67% and who knows how much “Obama phones” have grown. Those numbers are simply staggering. That welfare spending, when combined with the $300 billion states have to pay for federal programs, brings total welfare spending to $1.03 trillion, fully 7.5% of the American economy.

To put that spending in perspective, in 2011 the 500 companies that make up the Fortune 500 list earned a total of $825 billion in profit on revenues of $11.2 trillion for a profit margin of about 7%. (1/3 of that revenue came from outside the US)

It’s interesting to see what, in the right hands, upwards of ¾ of a trillion dollars can do.

Of course in the private sector it’s profits that drive the activity. Entrepreneurs often start companies because they’d like to make a profit doing what they love. Investors invest in companies because they believe the potential for profit outweighs the risk of losing their money. At its core profits are what drive a prosperous society.

So what did those 500 companies do to earn their $825 billion? They directly employed 17 million Americans and indirectly employed tens of millions more both in the United States and around the world. What’s more, they touched the lives of virtually every person in the country in one way or another: Utilities – PG&E and Georgia Power; cable TV – Cablevision and DirectTV; Food – Wal-Mart and McDonalds; Healthcare – HCA and Pfizer; Information – Google and TimeWarner; Entertainment – Disney and CBS; Insurance – State Farm and Aetna; Communication – Apple & ATT; Transportation – Ford and American Airlines.

The US revenue from these 500 companies represents about 50% of our GDP and improved the lives of virtually every man, woman and child in the country in the form of a paycheck or cheaper products or more efficient services or more effective treatments. They are the top performers in an economic system powered by innovation and experimentation and has generated unprecedented prosperity. All driven by $800 billion in profit…

Now contrast that with the government spending $745 billion. From food stamps to cell phones to housing assistance to healthcare, government spending on welfare programs have been growing for decades and have taken off like a rocket ship under the Obama administration. Surely with that much money spent the results must be phenomenal. With $20 trillion spent over the last half decade surely there must be no more poverty anywhere and no more hungry children.

Of course that’s not quite how things have worked out. Today there are 47 million Americans on food stamps, record levels of poverty and the most downtrodden communities are plagued by violence, broken homes, failed schools and double digit unemployment. Not so surprisingly the food stamp program is so well run that earlier this year Congress felt the need to prohibit EBT cards from being in strip clubs and stories of EBT cards being used for everything from liquor, to cigarettes, to porn to casinos are legion.

At the end of the day however, welfare is not supposed to be a profit driven endeavor. (Of course there’s nothing in the Constitution that gives the federal government the power to run a welfare program in the first place, but why quibble about technicalities…) The government created welfare programs were supposed to support those in difficult circumstances until they were able to get back on their feet. It, the welfare state, has been an abject failure for everyone involved, from the people whose money is taken to fund it to the recipients themselves, sometimes generations of them. This failure has been catastrophic, both in terms of the lives lived in misery or those not lived at all, as well as in terms of the loss of human capital in the pursuit of prosperity.

Is it not time to consider a model where the people who bring us everything from iPads to Velcro to overnight delivery to Big Macs are given a shot at solving the problem that government is simply incapable of solving? American private enterprise has driven the improvement of the human condition farther and faster than any economic system in the history of mankind. Is it not time to abandon the failed policies of the welfare state and allow the profit motive to attempt to solve a problem that apparently warrants the spending of a trillion dollars a year of taxpayer’s money on?

If not business per se, then private charities and churches. In his excellent new book “Who’s the Fairest of Them All? – The truth about opportunity, taxes and wealth in America” Stephen Moore discusses a study by Arthur Brooks that shows that private charitable dollars are far more effective in helping the poor than public programs. Moore states
"That is in part because private charity often requires some change in the behavior of the person receiving the aid, such as getting off drugs, working for the aid or helping others. Public charity almost never attaches these conditions".
And that explains why government welfare programs have failed. They don’t require anything from anybody. Private enterprise succeeds because businesses require adapting to circumstances and markets to achieve the goals. Citizens should demand that we harness the innovative power of the private sector to attack a problem that government has been making worse for 50 years. While the country as a whole would benefit from the lower taxes, the bigger benefit would be achieved by those freed from the oppressive yoke of government dependency who would be able to share in the prosperity that has so long escaped them. Now that’s redistribution worth considering.

Monday, October 15, 2012

The Obama victory strategy: lie, cheat & steal...

I would suggest that if Mitt Romney avoids shooting himself in foot he will win this election, and will win by somewhere around 10 points. That’s good news. The bad news however is that he will likely have to win by double digits in order to survive the Obama campaign’s plan to employ a phalanx of lawyers to somehow wrest factory out of the jaws of defeat. Of course employing underhanded tactics are nothing new from this administration.

As we have seen from the recent obfuscation, manipulation and outright lying on everything from Benghazi to Fast and Furious to last month’s unemployment figures, the Obama administration thinks laws and the truth are for other people. Given their indifference to the concept of honesty in governing, it’s not a surprise that their approach to elections is not that much different.

Let’s take Voter ID laws. Democrats in general and the Obama administration in particular oppose them. They suggest laws seeking to ensure that voters are indeed who they say they are are racist – simply the latest version of the notorious “poll tests” that were used to disenfranchise blacks for decades. Nothing could be farther from the truth. Voter ID laws are specifically intended to fight voter fraud and ensure that every voter’s vote actually counts and is not hijacked or canceled out by someone else.

So why would the Democrats and the administration push to fight voter ID laws? Simply put, to cheat. Voter fraud has been around for as long as voters have been going to the polls. From Kennedy carrying Chicago in 1960 to Al Franken stealing Minnesota in 2008, voter fraud has been affecting the American political map for decades, usually (although not exclusively) in favor of Democrats.

Eric Holder’s Justice Department has fought Voter ID laws in Texas, Pennsylvania, South Carolina and other states, claiming that they place an undue burden on minorities and the poor. On its face this claim is simply absurd, particularly as the IDs are free and many jurisdictions offer free rides to pick them up in the first place. It’s also the case that the poor likely already have an ID as they would need one to cash any government checks they might receive.

With a playbook that includes everything from felons or Mickey Mouse or the dead voting to voter impersonation and voting multiple times, Democrat opposition to Voter ID laws is simply an attempt to hijack the electoral process, particularly in close elections. As seen in Texas and Illinois in 1960 and Florida in 2000, close elections can have big consequences.

If fighting against honest elections is not enough to convince you about the abject dishonesty of the Obama administration and Democrats, one need only look to the campaign’s fundraising activities. The Obama campaign raised $181 million in September. It’s not, however, the amount of money that demonstrates their dishonesty, but rather how they raised it.

They did so by raising millions of dollars from foreign sources. That’s something of a problem in that foreign donations to federal elections are prohibited by law. How did they do it? By specifically disabling the most basic, industry-standard, security safeguards for online donations. If you’ve ever bought anything online you’ve probably been asked to enter your billing address and the 3 or 4 digit security code from your card. Legitimate businesses and organizations use that information to verify your identity to protect against theft. Not the Obama campaign.

On barackobama.com, while you are asked for your address, that information is not used by the campaign for verification. Indeed, the only information the campaign verifies is the number and the expiration date. If someone in Beijing simply claims to live at 101 Main St. Anytown, USA the campaign takes the donation. And if you think that might just be an oversight, it’s interesting to note that the campaign has not disabled that feature for purchases of merchandise – as they need to send the stuff to an address – only for donations.

Without that verification, it’s impossible to know the source of donations. Given that 43% of the visitors to barackobama.com come from outside the United States, it’s not much of stretch to imagine that much of the half a billion dollars raised thus far has come from foreign donors. Indeed, until news of its background came to light, Obama.com (owned by a Shanghai-based Obama campaign bundler) redirected visitors to the donation page on the campaign website. Now it’s just a blank page. Interestingly, 90% of Obama.com’s traffic came from China.

At the end of the day Barack Obama and the Democrats seek to win and will heavily tilt the scales in order to do so, be it fighting Voter ID laws to soliciting funds from foreigners to manipulating government reports. Thankfully Barack Obama is in the process of destroying his own campaign and will likely take his party down with him. Given that the election is not likely to be close there should be little their army of lawyers can do in court to overthrow the voice of the American voters. Nonetheless, look for an after action review of the 2012 election cycle to suggest that the Obama campaign was one of the most corrupt since at least LBJ. Thank god it will likely be a one term administration.

Monday, October 1, 2012

RIP USA...just another collapsing victim of the cult of liberalism?

A friend of mine posted the above from E.J. Dionne of the Washington Post on Facebook. While the post quickly garnered a number of “Likes” I was incredulous. My response was thus:
What a ridiculous statement. Tax cuts allow the rich and poor alike to keep more of the money they earned rather than give it to nameless, faceless and largely unaccountable bureaucrats to distribute.

Conservatives don't want to give the rich anything. They simply don't want the government taking from those who work or invest to give to others. That's pretty simple. If Dionne has such a good idea, maybe we should forgo paychecks altogether and simply let the government take the fruits of our efforts and then divvy out what they think we need for food, housing, clothes, cars and entertainment.

And that’s the problem with liberals – or at least one of them. They have these wonderful bumper stickers that are intended to make them feel warm and fuzzy about being good people and wanting to help the poor while conservatives want to take food out of their mouths to give to the rich for whatever they might want.
It’s a patently absurd statement. Liberals perceive tax cuts as giving something to the rich. Nothing could be farther from the truth. Tax cuts allow the rich and poor alike to keep more of the money they earned rather than give it to nameless, faceless and largely unaccountable bureaucrats to distribute.

To see how this works, lets imagine that you, despite the demagoguery, still think you’d like to be rich and create a great life for your family. As such, you and your wife decide to start a business. Since you’re a great cook you decide to open a restaurant. Here are just some of the things you’re going to have to do from a business perspective:

You’ll probably have to take out a loan for buying equipment, remodeling your space, signage, recruiting, hiring, training, inventory and of course licenses and permits from a phalanx of government agencies. (Note: Even if you incorporate, as most small businesses loans require personal guarantees even if the business flops, you’ll probably still be on the hook for that loan.)

Then there’s the lease, many of which require a minimum of five year contracts, even before you have a clue how successful your business will be.

Now that you’re prepared to open your restaurant there are just a few other areas you need to focus on: Marketing. Security. Cash handling or electronic security. OSHA inspections. Health inspections. Unemployment insurance. Business insurance.

As entrepreneurs you have to concern yourselves with those and more. Basically you’re risking tens of thousands, if not hundreds of thousands of dollars on a business venture with no guarantee that you’ll even get your money back, never mind make a profit off of it. Then there is the actual work itself. Once you start your business you can look forward to 12 to 16 hour days, probably 6 and maybe 7 days a week for months if not years on end.

Once you’ve made this commitment and to put your money and sweat into your business you hope that things far beyond your control don’t get in your way, from the economy to the local roadwork that could close access to your restaurant to a mad cow or salmonella scare three states away that could upend your menu.

Despite every entrepreneur’s best efforts, half of all small businesses are gone within 3 years. In your case you’re still standing after those three years. You’ve worked more than you’ve ever worked in your life. You’ve had to risk every cent you’re worth as well as whatever you could borrow from friends, family and the bank. It’s all been worth it however because you have a flourishing business doing $3 million a year, employing dozens of people.

Finally, when you sit down to do your taxes, when all is said and done you find that between the salary you and your wife draw you’ve earned $250,000, which is a far cry from virtually nothing during the first two years. Then it comes time to pay Uncle Sam. Of that $250,000 you now have to write the IRS a check for $82,500, fully one third of your income. That leaves you with $167,500 after (federal) taxes. Depending on where you live you might have to write another check for as much as $25,000 to the state.

Then the two of you compare your situation to that of your brother and his wife, both of whom work for the federal government. Together they earn $246,000 in pay and benefits, pay $45,000 in federal taxes and have after tax income (including benefits) of $201,000.

You look at each other and really think about that. You’ve sacrificed so much, you’ve worked so hard, you’ve put so much into your business and at the end of the day you’re earned less than a couple of bureaucrats. You wonder whether it would be better to give up the uncertainty, the risk, the long hours for the comfortable and virtually guaranteed-for-life job of a government apparatchik.

Thankfully, more Americans are still choosing to start businesses and create prosperity for themselves and their communities than become government functionaries. But the tide is turning and with people like E.J. Dionne and President Obama pushing the wealth envy agenda and vilifying the people who build successful businesses, how much longer until that is no longer the case and America becomes just another collapsing victim of the cult of liberalism?

Monday, September 3, 2012

A successful President Romney won't be your friend, but if we're lucky, he'll be a leader instead

Barring some unforeseen cataclysm, Mitt Romney will be the 45th president of the United States… and the vote will likely not even be close. His acceptance speech at the GOP convention last week did exactly what it had to do, it provided Americans who might have been sitting on the fence with the nudge they needed to climb down and pull the lever for him. If you had to distill his speech down to one line, it might have been “President Obama promised to begin to slow the rise of the oceans and heal the planet. MY promise...is to help you and your family.” In one fell swoop Romney put the absurdity of Barack Obama into context. It put in stark contrast his soaring, vainglorious rhetoric with the abject failure of virtually every aspect of his presidency. By contrast, Romney demonstrated his clear understanding of what is important to most Americans.

The question now becomes, what form will that “help” take? One assumes Barack Obama meant to help Americans by seeking to institute policies that advance his “share the wealth” agenda. That’s the problem with words like help, support, or phrases like “restore America”, “American values” or even “Hope and Change”. They mean different things to different people. Indeed they are by design sufficiently nebulous that anybody can read into them anything at all.

That is largely how Barack Obama got elected in 2008. Although he had a record that was crystal clear in demonstrating his leftist ideology, for the most part the mainstream media ignored it. As a result, many on the left (and in the middle) buried their heads and took Obama’s promise of “Hope and Change” to mean whatever they wanted it to mean. They interpreted it that Barack Obama was going to implement policies that pursued their particular hopes, whatever they might have been. As anyone who’s ever heard of a psychic reeling in a gullible customer with “There’s something in your past that troubles you…” can tell you, “Hope and Change” was a recipe for disaster and disappointment. And the resulting policies were just that. As a result, thankfully, Barack Obama is going to be a one term president.

Mitt Romney will need to follow a different path, otherwise he will suffer the same fate. His will have to be a presidency of leadership; explicit and painful leadership at that. Given the coming taxageddon, a 60% higher national debt and a floundering economy, Romney will have to deliver a variety of painful medicines to Americans of all stripes. Here are five suggestions that would help Romney combat the current malaise and help resurrect American prosperity.

1. He should freeze federal spending at current levels. Cut programs, personnel and redistribute funds among departments, but don’t increase spending by one single dime.

2. He should implement the Fair Tax. Absent that, he should immediately implement a 10% flat tax that applies to income, dividends and capital gains while eliminating all deductions, period. In addition, he should set a 20% corporate income tax.

3. He should roll over all federal debt into bonds with a minimum maturity of at least 10 years, with as much as possible into 30 year bonds.

4. He should require every federal department, commission and agency to provide a 10 page overview of every regulation on its books that impacts more than a quarter of a million people and or costs the economy by more than $100 million per year. Upon receiving those overviews, he should use a strict constructionist interpretation to determine if each is Constitutional, and rescind those deemed not to be so.

5. Finally, and perhaps most importantly, he should appoint Paul Ryan to present options that will harness the power of beneficiary choice and market forces to reform Social Security, Medicare and Medicaid.

In January 2013 Mitt Romney will find himself in a situation similar to that in which Ronald Reagan found himself 32 years before. The biggest difference is that in 1980 federal entitlement programs cost approximately $245 billion a year and represented 8.8% of GDP while in 2011 they cost $2.25 trillion and represented a full 15% of GDP. At the same time, the national debt, which must be serviced with taxpayer dollars, stood at 25% of GDP in 1980 while today it exceeds 100%.

Because of the potential consequences of an American collapse, the economic disaster the United States faces today is more precarious than any American president has ever had to face. Mitt Romney will not have the luxury of taking half measures in order to cure this disease. Success in the next president’s term will require him to clearly communicate to Americans the difficulties that we face and the consequences of not acting; demonstrate the courage to make the painful cuts that will be necessary; and finally, possess the fortitude to endure the withering abuse that will no doubt follow.

After two decades of unfettered spending by politicians of both parties, it’s time for Americans to learn that it’s simply not possible to spend more than you have in perpetuity. It’s time for a president to step up and bear the burden of articulating the challenges ahead and his plan to solve them. At that point citizens can begin to act accordingly. That’s the kind of help Americans really need.

Monday, August 27, 2012

Ethanol Mandates - the poster child for zombie government prorgrams that never die - regardless of the damage they do

By definition humans are imperfect. Some are more imperfect than others however. Nature has provided us with a mechanism to reduce the most imperfect among us. That mechanism is sometimes chronicled in something called the Darwin Awards. My favorite Darwin award of all time involved a thrill seeking man who strapped a solid rocket booster to his car in an effort to see how fast he could go. He went quite fast, in excess of 300 miles per hour actually… but, shockingly, the brakes for his car eventually disintegrated and he met his end after crashing into the side of a cliff. Thankfully nature’s lessons do not always end so… drastically, usually the only injuries are a few broken bones, a smaller bank account and maybe some wounded pride.

And that is the beauty of humanity. We often learn from our mistakes. We often learn from our experiences in order to make adjustments or better decisions going forward. Unfortunately, although government is made up of humans, it does not share that same skillset.

There is possibly no better example of this than the debacle that is Uncle Sam’s ethanol obsession. Since the Carter administration the government has been diverting your dollars to put ethanol into your gas tank. Initially it was intended to be a tool to help the United States become energy independent, it then morphed into a tool to help increase gas mileage and later it became a critical element in fighting global warming. Now it doesn’t even do any of those dubious, but theoretically positive, things. It’s simply become another failed government wealth transfer program.

The Wall Street Journal states: Corn is also a key ingredient in the combine of political power and corporate welfare that is U.S. alternative energy policy. The food-to-fuel mandate is known as the Renewable Fuels Standard (RFS) and requires 13.2 billion gallons of ethanol to be blended into the gasoline supply this year and 36 billion gallons by 2022. These quotas are fulfilled almost entirely by corn ethanol.

Ethanol is an industry that enjoys no natural market. The only reason the ethanol market exists in the first place is because of government mandates. And who are the beneficiaries of this corporate welfare that is funded out of your pocket? Mainly members of the farm / finance / producers cabal in the form of the Renewable Fuels Association. This advocacy organization that is simply trying to save our planet is made up of an array good hearted companies that are just too fragile to survive without Uncle Sam’s largesse with your money. Among these are food processor ADM (Rev = $80 Billion, #28 on the FORTUNE 500), transportation company CSX ($11 Billion, #226) and energy companies Kinder Morgan ($8 Billion, #311) and Noble Group ($80 Billion, #139 on the Global FORTUNE 500). This ethanol boondoggle translates into a $45 billion industry… money that comes out of your pocket and could be spent elsewhere if it were not being, literally, set on fire.

The worst part of the entire ethanol fiasco is the fact that not only does it not achieve any of its stated – and oft changing – objectives; it actually causes a wide array of unintended consequences – none of which are good. Number one is the fact that it drives up the cost of one of the most important foodstuffs in the world, corn, the price for which is up almost 300% over the last decade. That in turn drives up the price of virtually every other thing in the economy, from food to transportation to plastics. Then there’s the fact that ethanol damages engines and that the patchwork of ethanol standards across the country causes unnecessary price spikes and shortages. If all of that weren’t enough, ethanol has even scared off much of – but not all – of the anti-capitalist environmental lobby because – among other things – it drives deforestation on a wide scale around the world.

Finally, and most heartbreakingly, the ethanol mandates have driven the prices of American crops to near record levels, resulting in greater hunger in developing nations. One way they do this is to encourage farmers to switch to more profitable corn, which results in less wheat, oats, etc. to meet demand. This in turn results in less food making it into the stomachs of poor children around the world. In a nutshell, the mandates make everything in our economy more expensive, do little to alleviate our energy conundrum, actually harm the environment and make dollars donated feed the hungry not go as far. That seems like a policy that screams to be abolished.

Which brings us back to the Darwin Awards. If government programs operated the same way that humans do, at some point they would die as a consequence of their abysmal failure. Unfortunately however, they are not. Instead they keep on trudging down the same path and, indeed in this case the EPA keeps setting increasingly high ethanol standards that will double the amount of food wasted over the next decade. Of course like a potential Darwin Award candidate who stands on the roof contemplating jumping off to test his plastic wings, the EPA does have the option of stepping back from the ledge. It has the power to issue waivers to the ethanol mandates in emergency situations. One might imagine that the litany of problems caused by the mandates, when combined with the worst drought since the Great Depression, would qualify as just such an emergency. But of course the EPA is government and thus you’d be wrong.

At the end of the day the tragedy of ethanol clearly demonstrates the folly of big government. More than anything the element of common sense is replaced by catastrophic regulations imposed by greedy politicians and enforced by power hungry bureaucrats. In a sane world the ethanol mandates would have been history two decades ago. In the insane world of government however they are not only surviving, they are thriving. One only wishes you could say the same of the average American taxpayer, or more consequentially, the children in Africa who are going to be hungrier as a result of another reckless government program that lives on like a zombie long after it should have been dead and buried.

Monday, August 20, 2012

Who would you rather call if your child was in danger - Barack Obama or Mitt Romney?

Dinesh D’Souza recently penned a piece called “How I became George Obama's 'brother”. It talks about George Obama calling him (D’Souza) from Kenya seeking $1,000 for badly needed medical care for his hospitalized son. D’Souza, who had met George years ago when he was doing research for “The Roots of Obama's Rage” was happy to send the money, but wondered “Why are you coming to me?” George, the brother of the multi-millionaire President of the United States replied: “I have no one else to ask.”

Now of course, George not feeling like he could call his brother is different from his actually calling his brother and giving him the opportunity to help. That might be a strong argument on the President’s side if he was somehow unaware of George or if his circumstances were unknown. Neither is the case however. Barack Obama actually met his half brother in 1987 when his sibling was 5 years old and then again in 2006 when Barack Obama was a US Senator from Illinois. In addition to that, George Obama’s life situation in a country where the average person lives on less than $3 a day has been chronicled in the American media since Obama announced his run for the presidency in 2008.

D’Souza grants that George Obama is no angel, calling him a “drinker and a skirt chaser”. Nonetheless, George’s brother is the most powerful man on the planet yet when the health of his son was in the balance George didn’t feel as if he could reach out to him.

One might wonder why George felt the need to reach out to D’Souza rather than his big brother, particularly if he had heard President Obama’s speech earlier this year when he compared his values to those of others, saying “I am my brother’s keeper. I am my sister’s keeper. That’s a value.”

Well, it turns out that President Obama didn’t mean that he was literally his brother’s keeper, but rather he was using the biblical reference to suggest that the rich “do a little more”, i.e. pay more taxes.

That one speech gets to the core of the vision of America that voters are faced with in November. Barack Obama wants to take care of everyone, but he wants the government to do it with your money. Contrast that approach with Mitt Romney’s.

In 1996 a Bain Capital employee, Robert Gay, came to Romney and told him that Melissa, Gay’s 14 year old daughter, had snuck out of the house to attend a concert in New York and had been missing for three days. Romney immediately closed down the multibillion dollar Boston operation, set up a temporary headquarters in New York City and mobilized dozens of volunteers to search for the girl. He had Bain’s printing company print 300,000 flyers and had clerks at the firm’s drugstore unit stuff them into bags at checkout. The girl was found a week later recovering from a drug overdose, and, according to doctors, would likely not have survived another day.

To get another perspective on this contrast, one need only compare the tax returns of Romney and Obama. To compare apples to apples, one would compare Mitt Romney’s 2010 and 2011 tax returns to Barack Obama’s 2006 & 2007 returns – the two years before the presidential election.

The numbers are stark. In both 2006 and 2007 Barack Obama donated 6% of his income to charity. Mitt Romney during 2010 and 2011 donated 14% and 19% (respectively) of his income to charity. The goal of this piece is not to suggest that 6% is too low or that 15% is ideal. On the contrary. Everyone gives what they believe is appropriate.

The difference, however, is clear. Barack Obama claims that he is his brother’s keeper but believes it’s your job to actually pay for that upkeep, and he uses his position as President of the United States to compel such. Mitt Romney on the other hand suggests that it’s not the government’s job to take care of everyone, but rather individuals, communities, churches etc. and he puts his money behind those words.

Interestingly, this is not necessarily about greed or keeping money in his own pocket. If you combine Obama’s taxes and his charitable giving, he paid 39% in 2006 and 42% in 2007 while Romney paid 32% in 2010 and 42% in 2011. It’s about a fundamental understanding of the role of government. Barack Obama believes in the almighty government and their ability and responsibility to take care of the poor and the unfortunate and practically everything else in society. Mitt Romney on the other hand believes that while government can play a role in society, including providing a safety net for those in need, the primary responsibility for taking care of citizens lays with individuals, their families and their communities.

On November 6th, voters should not only think about how great a job the nanny state government has done with everything from food stamps to Social Security to Solyndra to Fast and Furious, they should also look to the plights of George Obama and Robert Gay. When citizens subcontract the support and well being of their families, communities or country to a nameless, faceless government bureaucracy there is a disconnect between the warm and fuzzy feeling they get for being caring people with good intentions and the actual results in the lives of the people in need. This holds true for feeding the poor, educating the children or creating jobs and prosperity. If there was an emergency with your child, who would you rather call for help? Barack Obama or Mitt Romney? This election may not involve a child in danger, but it certainly involves a nation in distress. The question is, who will the voters call upon?