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.