America Has a Perfect Storm of Opportunity to Save Herself From the RINOs in the GOP

The Missouri Compromise of 1820 was an attempt to deal with a problem that threatened to rip America apart, slavery. Although it didn’t address the underlying institution itself, it banned new states north of Missouri’s southern border from joining the union as slave states.

The delicate balance lasted until repealed by the Kansas Nebraska Act of 1854.

Although not explicit, the Act potentially opened up all of the west to slavery. For the north this was simply untenable and the result was the creation of the Republican Party, which formed in 1854 in the midst of the debate.

Of course, both were basically band aids over the real trauma that was destroying the nation, slavery.

The Republican Party was essentially the combination of the remnants of the Whig Party and elements of other peripheral parties. Six years later Abraham Lincoln would be elected the nation’s first Republican president. The party would go on to dominate much of American politics for the next half century.

In 1854 the Republican party came about as the result of America finally having to face a cancer that had been gnawing at it’s core since its foundation. In 2025 it should die for the same reason.

The cancer today is not slavery in the literal sense, but it is slavery nonetheless. In this case it isn’t blacks being held in bondage because of the color of their skin, but rather citizens being held in financial bondage by politicians who have no problem entombing them in a debtor’s prison from which escape is impossible.

The Republicans had a perfect storm of opportunity in 2025. They had just taken back the Senate, they held the House and on January 20^th they took control of the White House. Not only that, they had perhaps the most motivated electorate in a century or more. The tens of millions of Americans who watched as the 2020 election was stolen and then suffered through four years of anti American and anti-common sense policies were ready to take back their country. And they did.

What’s more, this highly motivated electorate spent the first two months of the new administration watching as the Elon Musk led DOGE revealed the billions and perhaps trillions of dollars of waste fraud and abuse everywhere from the Treasury Department to USAID to the Pentagon and elsewhere.

With the new sheriff in town these voters expected that things were going to be different.

Not so much…

No, the Republicans, the party America hired to actually codify the savings and bring some order to federal profligacy showed themselves to be derelict, indeed borderline treasonous the first chance they were given. 

While we’re being told the One Big Beautiful Bill Act (BBB) is a good deal and it cuts spending, that’s simply a lie. Indeed it increases spending and adds trillions to the national debt.

In what seems like record time the Republican party has gone from the party leading America in a new direction to the Go Along to Get Along party. Indeed, coming to power with promises to cut spending, get the federal government under control and to slash deficits, they’re doing virtually none of that. America took the red pill and discovered that it was really a blue pill dipped in food coloring.

The BBB is nothing less than treasonous. It does nothing to address America’s existential threat: Federal spending and deficits. Today America’s national debt stands at over $36 trillion, or over 120% of GDP, the highest level on record. Of that $36 trillion, $29 trillion has accumulated since 2000, 24 years during which the GOP held the presidency for 12 years, the House for 16, the Senate for 10, and all three for 6. Regardless, the spending seems to always go up and the deficits continue to grow until today where every single American, from baby to centenarian, is on the hook for $102,000. That, in a nation where the average household income is $80,000.

And yet the Republicans, the party that’s supposed to represent financial responsibility has presented America with a budget that basically spends like a drunken sailor.

To put this in perspective, one merely needs to recognize that the Republicans had as their number one cheerleader for the last year the world’s richest and most successful man but with the presentation of this “disgusting abomination” they have made a literal enemy out of him. Addressing the Republican treachery head on, Musk suggested “In November next year, we fire all politicians who betrayed the American people.”

Simply put, the Grand Old Party is grand no more. It is simply Democrat lite and should therefore sent to the dustbin of history.

Of course as we learned with Teddy Roosevelt and H. Ross Perot, third parties don’t work in the United States. The reality is, a new party doesn’t need to be started from scratch. Just as the GOP was built on the remnants of the Whig Party, a new party could be carved out of the decomposing husk of the GOP. Just look to how well that treacherous John Cornyn is doing down in Texas to understand how it’s possible to send swamp rats out to pasture.

And Elon Musk should lead this charge.  Although currently on the outs with President Trump, in reality the two have far in common than not. He should spearhead the creation of this new party, one where financial discipline is, if not the raison d'etre, is a core element beyond compromise.  And the DOGE team has given them more than enough to work with.  Much like Newt Gingrich did in 1994 with his Contract with America, Musk et. al. should build on the DOGE recommendations and put together a new Contract of items that most Americans can agree on and use that to eviscerate the RINO wing of the GOP. 

Most Americans don’t like thousand page omnibus bills that no one can read and fewer can understand.  This new Contract should promise single department bills written in plain English.  Americans don’t like seeing budgets that go up year to year with seemingly zero correlation to the agency’s success or failure.  This new Contract should propose zero based budgeting so that agencies and departments have to make the case for their spending every year or every other year.

These and other no-nonsense policies will no doubt raise the ire of virtually the entire Democrat party, most of the bureaucracy and of course the swamp Republicans.  But they would likely resonate not only with average Republican voters, but they would likely appeal to many of the non-deranged elements of the Democrat party who are simply exhausted with the status quo of dysfunction.  And now is the time, before it’s too late.

One hundred and thirty five years ago slavery was an existential threat to the survival of the United States and it took a war and 600,000 lives to defeat. Debt figures on an accounting sheet might not sound like an existential threat, but make no mistake, they are. Whether Zimbabwe or the Weimar Republic or third century Rome, spending matters, deficits matter, numbers on an accounting sheet can eventually turn deadly. When this debt bubble bursts America will come apart at the seams and it will make the collapse of Venezuela look like a walk in the park.

But it doesn’t have to be. History doesn’t often pair a highly motivated public with the world’s richest man on the same side of an issue so clearly in need of fixing. It has now and we should seize the opportunity and take what little good that remains of the GOP and build upon it a new party that puts the needs of America above those of grifting, power obsessed politicians. That’s the kind of change Americans voted for.

Follow Vince on X at @ImperfectUSA

The Cost of Prosperity - Distraction From What Really Counts

Americans are busy people—but the real risk in the lead-up to 2024 is that we may be too busy to pay attention to our last chance to preserve our liberties.

In one respect we’re no different than any other people on the planet given that our primary needs are food, water and shelter. Beyond that however, Americans enjoy a life of leisure opportunities that virtually no one else on the planet enjoys. Not leisure that’s measured in hours worked as in France or Germany. Workers in most developed countries work fewer hours per year than Americans do.

No, what’s different is that Americans have so many ways to spend their leisure time: Motocross. Shopping. Video games. Countless cable channels. Amusement parks. Golf. Swimming. Skiing. Football. Baseball. Golf. Putt putt golf. Pickleball. Off-track betting. Gymnastics. Theater. Karate. Star Trek conventions. Habitat for Humanity. Cornhole. BBQ competitions. Quilting competitions. Beauty pageants for kids. These are only a tiny fraction of the myriad options Americans have at their disposal to entertain themselves or spend their leisure time watching or participating in.

If one were to compare the spectrum of activities available to the average American with the equivalent spectrum for any other country on the planet, it wouldn’t take long to see an enormous difference. Many countries share some of our pursuits, but the depth and breadth available to Americans is unparalleled. None of this came about by accident. The reason Americans have dozens of sports and thousands of activities to participate in, from grade school to the senior center, is because the nation has been so prosperous for so long, and the nation has exemplified creativity for things both consequential and not. The result is a nation where most people have available a level of entertainment and leisure unparalleled in history.

One consequence of such is that Americans are busy. So busy, in fact, that they forget to pay attention to some things that really matter—specifically, government. In a perfect world, no one would have to pay much attention to the government because it would be run like a well-oiled machine in the background that wouldn’t cause any trouble. But that’s not how governments work. Our Founding Fathers knew that, which is why they gave us a government of separated powers with staggered terms for those responsible for exercising them. But even such a near-perfect document cannot stand forever in the face of avarice and the lust for power.

That greed and lust for power is the defining characteristic of what we call the Swamp. And it was enabled by a plethora of acts that strengthened and emboldened the apparatchiks who man it. These included Executive Orders by JFK and Nixon giving federal employees powers or “protections” they’d never previously had, as well as a 1984 Supreme Court case that required courts to defer to federal agencies as it relates to rule-making when there is ambiguity in the legislation.

Together, these and other acts made the Swamp possible. They built a federal government where it’s almost impossible to fire anyone, and agencies essentially get to decide who and what they regulate while those affected have limited redress. So basically, we have agencies that decide what laws they want to write staffed by people who can’t be fired regardless of their failure, incompetence, or criminality.

Of course, every two years, the cacophony that is American life is made that much more dissonant by elections. Most Americans, however, unfortunately, spend less time learning what’s really at stake in those elections than they do selecting teams for their March Madness brackets or wondering what’s going on in the dysfunctional Kardashian universe. The reality of this disaster was demonstrated 15 years ago by John Ziegler.

This situation might have been acceptable 100 years ago when the federal government was relatively small and had little discernible impact on most American lives. Today, however, when the leviathan of the federal government seeks to control virtually every aspect of our lives, it’s simply not. There’s a tipping point in every endeavor in life, and the lifecycle of a Republic is no exception. Leaving the Constitutional Convention, Benjamin Franklin was asked: “Doctor, what have we got—a Republic or a Monarchy?” He responded: “A Republic, if you can keep it.”

Two hundred and thirty years later we are on the verge of losing it. The problem is that too many Americans have no idea what the danger is and have little interest in finding out. They’ve spent so much of their lives enjoying the leisure and entertainment our Republic has made possible that they’ve forgotten that the foundation of freedom and prosperity upon which those conditions are built are not ordained by God, not set in stone, and not guaranteed. The conditions underlying Americans’ freedoms and prosperity are far more fragile than most recognize but, like frogs in a pot of slowly warming water, they’re succumbing to the creeping threat. Indeed, there’s an inverse relationship between government micromanagement and citizens’ freedom.

In what might be the single most crystallizing example of government micromanagement of Americans’ everyday lives since Barack Obama’s attempts to destroy the suburbs, the Biden Administration is considering banning gas stoves and a plethora of other items Americans use in the normal routine of their daily lives. Think about that…

Natural gas has been a key element of cooking in America for centuries. It’s a clean-burning fuel, cheap and plentiful, with a variety of sources, mostly in red states, which makes it hard to control. So, if Democrats can’t control the supply of something, they simply take control of the demand. Doing so in this case has the twin virtues of harming the economies of red states while forcing Americans to buy new, “green lobby approved”—read: dysfunctional and expensive—appliances. All, of course, in the name of the “Climate Change” hoax.

These and literally tens of thousands of other federal regulations are the cost to Americans of not paying attention, summed up by the notion that politics is downstream from culture. Hollywood and the media destroyed American culture, which made turning Washington’s alphabet departments, agencies, and bureaus into tools of tyranny easy.

The question is, can anyone shake the American people out of this political stupor long enough for them to recognize the danger they face? Will Americans rise to the occasion in 2024, or will they instead continue to eat the fruit from the tree of liberty, oblivious to the rot of its roots?

Perhaps a paraphrasing of Martin Niemöller might help:

First, they raised the minimum wage, and I cheered because I had a job.

Then, they destroyed public education, and I didn’t act because I sent my kid to private school.

Next, they limited cable rates, and I applauded because I saved $20 a month.

When they came for my light bulbs, I didn’t react because it made me feel good to help the environment.

One day, they said ethnicity was more important than ability for college acceptance, but I said nothing because I’d already graduated.

They increased taxes on the rich, and I didn’t care because I wasn’t rich.

Then they came for my gun, my car, my job, and eventually everything I hold dear, but there was no one left to stand with me because no one remembered what real liberty was or how it was supposed to be protected in the first place.

Ted Cruz's Only Hope for Indiana and Beyond: "The Government didn't build the American Dream..."

This has been a tough week for Ted Cruz. He lost 5 states by double digits. Of course they were all northeastern states which means there’s a snowball’s chance in Hell that they will be landing in the red column in November. Nonetheless Trump won them fair and square and he appears to have momentum.

So now there’s Indiana. The numbers are such that if Cruz does not win Indiana, it becomes almost impossible for him to stop Trump from getting to 1237. Given the glowing coverage that Trump gets from the mainstream media, as well as his cheerleaders in the erstwhile conservative media such as Drudge, Rush, and Hannity, Cruz finds himself very much fighting an uphill battle.

He can’t outTrump Trump. He can’t accuse Trump of lying – despite the fact that he is. He can’t accuse Trump of seeking to intimidate delegates – which he is doing. He can’t make nonsensical appeals to uninformed voters’ base instincts – because that’s not who he (Cruz) is. No, the only chance Ted Cruz has to win Indiana – and California beyond that – is to make his pitch for the American Dream.

Basically, it's that Dream that is behind so many voters flocking to Trump in the first place… that along with our celebrity worship culture where many elevate celebrities to a demigod state, regardless of their less than godlike behavior. Americans are angry that opportunities for advancement are disappearing. Americans are angry that every widget found in Wal-Mart is manufactured in China and every tee shirt in Pakistan. Americans are angry that an American icon, Ford, would reduce production here just to add production in Mexico. And Indianans are angry that Carrier would close a plant in Indiana just to open one in Mexico. The bottom line is, many Americans wonder what happened to a country where hard work and innovation were rewarded and where half the population was not on welfare of one sort of another.

One guy seems to be harnessing their anger and making it so they don’t feel like no one is listening… and that guy is Donald Trump. Ted Cruz needs to jump into the scrum. Ted Cruz needs to be crystal clear that he understands what they are feeling… but he shouldn’t pander while doing so… or he’ll be seen like Hillary trying to use an MTA card. No, Cruz has to talk about their issues, but do so in the context of what is causing them. Manufacturing is indeed moving the Mexico and China… but it’s not because companies like Ford and Carrier hate Americans… it’s because the government has made it so difficult for them to operate and earn a profit in the United States. And it’s not just labor costs, because Ford could have saved half its labor costs simply building the Focus in Alabama or Kentucky rather than Michigan. No, the much bigger problem for companies trying to manufacture and keep jobs in the United States is regulation.

Ted Cruz needs to point out that it’s not malice that encourages American companies to build products outside our borders… it’s government. Federal regulation costs the US $2 trillion a year… Looked at in jobs, just half that total would translate to 10 million new jobs at an average salary of $75,000 each. Unfortunately, this regulatory burden not only makes it more difficult for American companies to build here, it scares off international companies who might otherwise invest in the United States. Fundamentally, if the government would loosen the regulatory yoke and unleash American industry, our economy would once again dominate the world.

And then there is the IRS. Because at 40%, the United States has the highest corporate income tax rate in the developed world, companies find it less competitive to invest in the United States. Not only that, American companies have $2 trillion in profits sitting in subsidiaries around the world that they can’t bring home because it would cost them too much in taxes. That $2 trillion alone would provide 2 years of paychecks for 15 million Americans at $50,000 a year. By eliminating the IRS and implementing the Fair Tax – which Cruz likes but doesn’t push – a President Cruz would welcome trillions of dollars of investment in the United States from around the world.  Cruz's 10% income tax would have a similar, albeit a somewhat smaller impact.

At the end of the day, the only chance Cruz has to win Indiana and keep Trump from becoming the nominee is to clearly and forcefully articulate that the enemy of prosperity is not Carrier moving a plant to Mexico or Burger King moving its headquarters to Canada… it’s government strangling the American Dream one regulation at a time, it’s tax rates that handicap the country relative to the rest of the world. And in setting up that argument, he has to highlight the fact that Donald Trump’s solution of trying to tax Carrier back into the country is not the answer because for every Carrier that makes the news, there are hundreds of other companies around the world that aren’t located here and never will be because taxes and regulations simply make it too expensive to invest in the United States and create American jobs.

Donald Trump wants to scare companies into staying in the United States and employing Americans. Ted Cruz wants to inspire companies, both American and foreign, to invest in the United States and employ American workers. That’s a big difference and Cruz has to make that clear to voters. Trump wants to use the government to coerce companies to do what he wants while Cruz wants to lighten the government burden and allow American companies and American workers do what they do best, which is innovate and build their way to prosperity. The government did not invent the air conditioner, Willis Carrier did. The government did not bring the assembly line to the automobile, Henry Ford did. But government regulations have sent the companies those two men founded scurrying south of the border to build products in their names.  That is the shame of America in 2016... America used to be a place for entrepreneurship, innovation, invention and most of all, prosperity.  It's not today because of government.  The American Dream used to inspire both Americans and the rest of the world.  It doesn't do that much today because the government has smothered it...

And that's the message Cruz needs to get out:  "The government needs to get out of the prosperity killing business and out of the dream killing business... I understand that and I'll make it happen... Lifelong crony capitalist and John Boehner's golfing and texting buddy Donald Trump won't." 

Donald Trump as the Isolationist in Chief... Not a Recipe for Success

As I’ve said before, if Donald Trump is the nominee I will vote for him over anyone the donkey party runs. Why? One reason… the single greatest threat to our nation is open borders and the continued entry of people from failed states with no understanding or appreciation for limited government or individual rights. The Democrat Party, which has a similar disdain for both things, has almost destroyed the country on its own and with open borders it seeks to tip the scales of our Republic towards their tyranny by packing the voting rolls with such invaders…

The candidate who promises to build a wall and curtail illegal immigration gets my vote… and my hope that he will actually do so.

But I have to say, Trump continues to make it much more painful to be willing to support him. From his thin skin and childish Twitter tirades, it makes one wonder how temperamental a President Trump might be. Something more consequential that forces some soul searching when considering voting for him is his unserious perspective on international relations. When he says things about not sending money to countries that hate us, that makes pretty good sense and makes a great place to start with foreign aid. But he doesn’t stop there. There are two things that are particularly troubling about his foreign affairs perspective. His populist tirades against free trade, and his statement of two weeks ago that the United States should pull back from its leadership in NATO.

On the former, Trump cries that the United States is losing out on trade with China and Mexico and other nations around the world and that these countries are taking the jobs of millions of Americans. Both of those suggestions may indeed be accurate, but he is wrong in that they are a symptom, not the illness itself. The primary driver of those issues is not that Mexico or China are cheats. They may be manipulating their currencies or labor markets, but that’s not why American companies choose to build iPhones in China or cars in Mexico. It’s American taxes and regulations… Think about it, China is a Communist country separated from the US by 6,000 miles of water and Mexico is a dysfunctional quasi state where the politicians and population are perpetually intimidated by narco terrorists. And somehow it makes sense that a US company would want to manufacture widgets in those places rather than in Detroit or Pittsburgh? Yes. Sure, labor costs are a problem, but it’s regulations and taxes that are the real drivers of trade deficits. According to the Competitive Enterprise Institute, federal regulations cost American consumers almost $2 trillion in lost economic productivity and higher costs in 2014. And that’s just the federal government! That $2 Trillion was almost four times the entire US trade deficit with the whole world that year! Add to that the fact that US tax rates are the highest in the developed world and that giant sucking sound of jobs you hear is not because of China or Mexico’s cheating, but rather because the US government is simply making it too difficult to operate profitably in the United States. If Trump wanted to make our trade balance more balanced and bring back jobs he’d focus on eliminating regulations here rather than spending most of his time demagoguing the rest of the world.

The bigger problem with Trump’s world view is his fundamental misunderstanding of the role of the United States in said world. Two weeks ago he suggested that the United States should take a step back in its leadership of NATO. We could do that and it would certainly save us billions of dollars a year. But it not only would it lead to a world war, but it would be the catalyst for a collapse of the world economy and western culture. Why? Because it was American military power, presence and a willingness to use both that has kept the west largely at peace for the last 70 years and driven a greater increase in world prosperity than in any period in all of human history.

To understand the impact of a United States led NATO, one simply has to look at the history of Europe. For two millennium, from the rise and fall of the Roman Empire to the rise and collapse of the British Empire, Europe was at an almost constant state of war either within itself or without, and often brought much of the rest of the planet along with it.  That reality culminated in the two world wars of the first half of the 20th century that cost the lives of over 100 million men women and children. Post WWII however, after the United States military brought order to a world in chaos, Europe and much of that world have enjoyed an unprecedented period of relative peace, and as a result saw wealth and prosperity grow and expand at levels unprecedented in human history.

None of that happens without a NATO led by the United States. It was NATO that kept the Russian bear at bay for half a century and American leadership in the Pacific that kept the Red Chinese from swallowing much of Asia. And as a result Europe and Asia have become critical trading partners with the United States and have provided both markets for our goods and sources for things that make our lives better.

And now Donald Trump wants to abandon NATO leadership. In the name of populist rhetoric he wants to turn his back on a successful world that the United States largely designed and benefits from. That would be a mistake. For our partners in NATO, for much of the world that relies on the west for leadership and trade, and, most of all, Americans. The solution to a troubled planet isn’t to pull up the drawbridges and hide behind the moat… But that seems to be the Donald’s plan.

It would be a tragedy if American leadership having already devolved from Ronald Reagan defeating the Soviet Union and winning the Cold War to Barack Obama embracing anti American thugs across the planet and unleashing ISIS on the world is followed up by Donald Trump reviving the isolationist policies of the 1930s that led to WWII… because with bellicose and acquisitive states like Russia and China unrestrained by American strength it would not be long before WWIII was at our shores.

But, such is the nature of populist candidates. Say and do anything that will get cheers from the crowds and ignore the consequences down the road. Let’s hope in November we have a Ted Cruz lever to pull

Ted Cruz and the Oxymorons of Washington

Oxymoron: A figure of speech in which apparently contradictory terms appear in conjunction

One sometimes thinks the word started with our government: Government Intelligence… Government Efficiency... Government Accountability… In reality, it’s been around since the Greeks first coined the phrase, no doubt adding oxy to a word they probably used to describe their politicians too: Moron.

The Greeks may have invented the word, but the US government has perfected its common use. We have a welfare system whose ostensible goal is to get people back on their feet during hard times yet the numbers of people on the program never seems to go down. We have an education system that spends an ever increasing amount of money to somehow do an increasingly bad job of “educating” our students. Barack Obama has penned an agreement with Iran to keep them from getting nuclear weapons that actually rewards them for bad behavior AND makes it more likely they will get nuclear weapons!

As bad as those things are, and there are countless other examples, this very day we are witnessing possibly the single best example of government incompetence possible. So far this fiscal year the IRS has taken in more money than ever before, $2.6 trillion! Yet somehow they still managed to run a deficit of almost half a trillion dollars. And just two nights ago the utterly worthless GOP introduced a bill that enables even more incompetence in the form of a giant two year spending bill that would also raise the debt limit.  Somehow, Americans watch the middle class struggle while programs for the poor proliferate and the connected rich see their incomes skyrocket as Washington and its regulatory machine smothers more and more of the free market.

This is Washington unhinged. This is how liberalism works… including when enabled by the GOP. The government takes more and more of the citizens’ money, which leaves the citizens with less income with which to live their lives, nevermind have money left over to start businesses as they pursue the promise of prosperity. Seeing the resultant slowing economic growth, the government decides to come to the rescue by creating more regulations and more giveaways to make up for the “failures” of the free markets. It’s a viscous cycle… More government equals less freedom and less prosperity.

And today we have on full display the GOP’s disdain for freedom and prosperity. They seek crony capitalism for the specific purpose of ensuring their continued participation in the Washington cocoon – a comforting place where 7 out of the 10 richest counties in the country are located – out of a total of 3,143 counties! That Washington cocoon provides them with parties to attend, a staff to do their bidding, jobs for friends and family, introductions to the “right” people and of course a golden parachute upon leaving after having done enough favors for big business.

Unfortunately, this is likely a fait accompli as the anointed one, Paul Ryan, the soon to be head squish has jumped onboard. The result of this betrayal of the American people makes it only that much more important that voters look to someone like Ted Cruz to be the next president. We are at a point where the government continues to take more and more of our money, yet continues to demand to borrow even more, and this is while the GOP has both the House and the Senate. Ted Cruz has both the intellect and the intent to thwart the liberal enablers in the GOP. No one else in this race has shown the willingness to fight the GOP establishment the way Cruz has. Today’s treachery puts the nation on notice. If you want a change from the failure of liberal policies and crony capitalism, put someone in the White House who does more than talk a conservative game. Put someone in there who has shown a willingness to fight the leviathan of government and it’s GOP enablers. Someone who's not an oxymoron... That man is Ted Cruz.

A solution for American economic malaise - Detroit as a proving ground for economic prosperity.

The United States is in the midst of an economic malaise. 92 million Americans are out of work. 35% of the population is on welfare. The economy is barely growing. While incomes for the richest have been skyrocketing, the middle class has seen their incomes decline by 5% in the last 5 years. The federal debt stands at $17 trillion, up $6 trillion since Barack Obama became president. All of this while the Fed has been pumping tens of billions of dollars a month into the economy for years…

Although Barack Obama has made much of this worse, the truth is, things have been going the wrong way for half a century and rather dramatically for a quarter century. Of all of the problems that exist today – and their numbers are legion – there are two that are most troublesome: regulations and taxes. These two things have hammered the fount of American prosperity, the middle class.

First is the regulatory state – particularly federal regulations. Being an entrepreneur, running a successful small business (from whence 2/3 of all new jobs emerge) takes a great deal of work, tenacity and effort. Unfortunately however, the cost of complying with regulations has skyrocketed over the last 40 years. From the EPA to OSHA to the NLRB to HHS and a seemingly endless array of acronymmed bureaucracies come regulations that strangle job creation, and in the process, prosperity. According to the US Chamber of Commerce – no friend to small business – the cost of complying with government regulations at all levels has almost quadrupled since 2000… and all of those increasing costs contribute to the growing death rate among small businesses, which in turn take jobs with them.

Then there are taxes, again, particularly federal taxes and the insane complexity of the IRS tax code. This can be summed up in one measure: According to the Tax Foundation’s 2014 International Tax Competitiveness Index the United States ranks 32 out of 34 developed countries in terms of the competitiveness of our tax system – and if it weren’t for our relatively low consumption taxes, ranked 5 out of 34, we’d be dead last. That means, for companies seeking to invest their money, of the 34 OECD nations, only 2 of them have tax structures that are less inviting than the United States, Portugal and France. Imagine that, that the United States tax system is less attractive to investors – and prospective employers – than Turkey, Estonia, Chile… and even the dysfunctional Greece! While the United States does have advantages… for investors, tax consequences are an extraordinary driver of their choices. And unfortunately for American workers, the government is making the choice to invest in the United States less and less appealing every year.

Despite what you might hear on the Sunday morning news programs or read in the NY Times, this new American malaise is not an intractable problem, is not an unsolvable problem, in fact, the solution is rather simple. Fix those two problems. “How?” you say.

First, sunset every federal regulation on the books. If necessary, pass a Constitutional Amendment that states that every federal law has an implicit sunset provision of 10 years unless it passes each house of Congress by at least 60%. It would also stipulate that all federal regulations sunset after 10 years, regardless of the margin of passage of the underlying law. If such regulations demonstrate themselves to be effective and necessary, they can be renewed. If a regulation were deemed or proven to be sufficiently important to be granted permanent status it should then be passed as a law rather than remaining a regulation.

Second, implement the Fair Tax – although a 10% flat tax might be a distant second suggestion. In 2014 investors have the world at their fingertips. Choices abound from Estonia to Singapore to Switzerland to Canada. If the United States were to implement the Fair Tax, not only would the economy be jolted by an immediate influx of an estimated $2 trillion from the offshore holdings of American companies, it would likely experience an additional annual influx of hundreds of billions of dollars of direct investment from foreign companies seeking to set up shop in the United States. Those additional trillions of dollars would result in the creation of millions of jobs – and these would be real jobs in the real economy, unlike the boondoggles inflicted on the country by President Obama’s “Stimulus”. In addition, the resulting savings of the hundreds of billions of dollars wasted each year simply trying to comply with the incomprehensible IRS tax code could be spent on useful things – or just fun – and the hundreds of millions of hours saved could be spent on work or leisure.

Of course it’s one thing to point these things out and another to actually get them done. So, as in an effort to demonstrate the potential effectiveness of the above I’d like to suggest using Wayne County, Michigan – where the disaster area known as Detroit is located – as an “Enterprise Zone” proving ground. This demonstration would turn Wayne County into a federal tax and regulation free zone. Eliminate all federal regulations within the county and eliminate all federal taxes save a 23% embedded tax.

This wouldn’t impact public safety or individual rights as public safety and law enforcement are state and local functions while citizens’ rights don’t come from regulations but from the Constitution… which would still be in force.

Creating a county wide Enterprise Zone centered on the country’s most economically dysfunctional city would be a perfect opportunity to demonstrate the potential prosperity free market competition can create. Massive amounts of investment would take place and a cacophony of companies would be started, sometimes built on nothing more than an entrepreneur’s idea and a willingness to take a risk. And at the same time, jobs would be created… lots of jobs would be created, with employers competing for the best workers.

While there would be some logistical challenges to implementation due to the fact that the proving ground would be surrounded by non participating counties and cities, at the end of the day the results would demonstrate clearly the potential benefits of dialing back the twin garrotes of federal action that have been strangling American prosperity for half a century. With actual data in hand then the debate over applying the same to rest of the country could begin. Maybe then the country could get back on the road to prosperity where a rising tide lifts all boats rather than today’s perpetually receding tide that leaves most American boats slowly sinking in the mud of the exposed sea floor.

The Profound Rush Limbaugh: ”Have you ever noticed how under capitalism the rich become powerful, and under socialism the powerful become rich?

Love him or hate him, there is no debate about the fact that Rush Limbaugh is a genius. Last week he said the following:

”Have you ever noticed how under capitalism the rich become powerful, and under socialism the powerful become rich? It's amazing when you look at it that way. Under capitalism, the rich become powerful. Under socialism, the powerful get rich. They exploit others. They get rich by taking from others, by using their power. In capitalism, the rich become powerful. It's a minor little distinction. It's one of those little pithy bullet points that is just shy of a profundity.”

I have to disagree with Rush slightly… that statement is indeed profound. Although he characterizes it as a minor little distinction for rhetorical purposes, his context demonstrates exactly how significant it really is.

When you think about it, on the most basic level, it makes perfect sense. In socialist, communist and fascist countries, despite the egalitarian rhetoric, invariably it is the people who control the infrastructure of the state who end up with the biggest bank accounts and grandest (relative) lifesyles. They decide who can do what jobs, who can get what permits, who can open up what businesses. Given that the state controls the avenues through which so much of life runs, is it any wonder that corruption is often rampant? Is it any wonder that while Muscovites were looking for food on barren supermarket shelves Brezhnev gorged himself at his Jurmala dacha? Or is it much of a surprise that while Mugabe has turned Zimbabwe into one of the poorest countries in the world he has accumulated billions of dollars in personal wealth? It comes as no shock that to get anything done in Mexico takes the greasing of palms of government officials all along the way. The reality is, when government controls most aspects of life, from the major to minutiae, they get to decide who is successful and who is not, and often they choose themselves their friends and their families.

Of course everyone wants success, but the difference between state control and free markets is who gets to decide what constitutes success and who gets to enjoy its fruits. With state control it’s the bureaucrats who get to decide while in free markets it is the citizens. One can quickly guess which produced "green" cars no one wants, a healthcare system that doesn’t work or a tax code so complex even its authors can't understand it. 

You may hate Wal-Mart, but no one ever forced you to shop there. Wal-Mart became a half a trillion dollar behemoth not by forcing customers to come into their stores, but rather by advertising what they were willing to sell and for how much. People willingly walk into their stores and voluntarily exchange their hard earned dollars for Wal-Mart’s goods. You may have heard that JD Rockefeller was a “son of a bitch” businessman, and you’d be right. But he earned his money by standardizing the industry and lowering prices on kerosene, gasoline, and a wide variety of other petroleum products as well. Although competitors were sometimes mad, consumers and the economy benefited dramatically. The success of Standard Oil was based on selling products to willing consumers, not on government redistribution. The same holds true today for Intel, Apple and Frito Lay, just as it did for others like Sears and Roebuck, Gillette and Howard Johnson a century ago.

In the United States numerous rich businessmen have converted their success into power. The Koch brothers come to mind. So too does George Soros and Michael Bloomberg. But the difference is, what those guys are selling, we don’t have to buy.

While the US may still ostensibly be a capitalist system, how long that will last is open for debate. Today we are rapidly becoming a command and control socialist country with Washington as the vortex. Government tells you what kinds of bulbs you can buy, who you have to rent your house to and how you can use your property among other things. It takes the money you worked for and uses it to give phones, EBT cards and birth control pills to those who didn’t. Basically Washington has the power, and now it has the money too. The Washington DC area now has 6 of the 10 richest counties in the country. Out of 3,100 counties in the US, 6 of the 10 richest in the Washington DC Metro area! To put that in perspective, Occupy Wall Street was worried about the country being run by the richest 1%. Those 1% guys are pikers, in reality the country is run by .0019% richest, and they live in Washington.

And why does money flow to Washington?  Simple.  That’s where the power is. Because that's where the laws and regulations that restrict your freedom come from. Washington’s bureaucrats don’t solicit explicit bribes like they do in third world countries… but then they don’t have to. They earn twice what private sector workers do, have virtual lifetime employment, and have the "respect" that comes from having the power to destroy a business or an industry with a stoke of a pen. As a result, while some companies spend money in Washington seeking to suckle at the public teat, (defense, agribusiness and green energy industries come to mind) most firms today spend their money on lobbyists not to get dollars from government, but rather to influence legislation and regulations so that they can simply survive.

Capitalism is not yet completely dead in America. Thankfully guys like Mark Zuckerberg, Simon Cowell, Sean Combs and lots of other people whose names we’ll never know are able to create businesses that earn them millions or billions of dollars without stealing a single dollar from any one of us or eviscerating one iota of our freedom. But one has to wonder how long that will last. Today there are 92 million adults in the United States who are not working. From unemployment benefits that last for years to welfare programs that create lifelong wards of the state to regulations and taxes that disincentivize work, one has to wonder what the real agenda of Washington is. Is it to see a resurgent private sector where more Americans can support themselves and their families without government help, thereby inducing a reduction in the size of the army of bureaucrats and lobbyists? Or is it to slowly strangle capitalism so that more and more jobs and lives look to Washington for their preservation, which in turn means bigger government, more lobbyists and of course more money for Washington.

With Mark Zuckerberg getting rich off of us and our data, it’s an even exchange in that we have a free choice in deciding how much of that data we’re willing to exchange. If we don’t like it we can simply delete our Facebook accounts. However, when the Washington establishment uses the police power of government to get rich off of us, we have no options, we can’t simply choose to not pay taxes or simply start another business without Washington’s interference. It’s not possible. What we can do however is work fewer hours, shut down our businesses or take the path that more and more Americans are taking every day; to simply give up working altogether and look to Washington for our every need. My guess is that Rush would probably say that is exactly what the left's agenda is. And as usual he would be right.

My rather lopsided love/hate relationship with Barack Obama…

Some time ago I was talking with a guy I know and the issue of politics came up followed soon thereafter by the mention of Barack Obama. I instantly said “I hate that guy!” Afterward I wondered if that was really an accurate statement… after some introspection I have to admit, it's kinda true.

I know in a world of political correctness I should maybe not say that… but I feel as if I must, if for no other reason that explain why. Although I don’t actually know Barack Obama personally, that is exactly how I feel. On a personal level he might be a great guy. He’s certainly personable, he might be a great guy to have a beer with, he appears to be a good father and he would probably make a great guest on SportsCenter. Nonetheless, the dictionary defines hate thus: “To dislike intensely or passionately; feel extreme aversion for or extreme hostility toward; detest.” That seems about right.

How is it even possible that I might have such a strong feeling towards someone I’ve never met? Charlie Rangel and MSNBC and the rest of the fabulists - about all things conservative and Tea Party related - would suggest it’s because he’s black, obviously. That’s their right, but nothing could be farther from the truth. While I despise Barack Obama, it has nothing to do with his skin color. Frankly I feel exactly the same about Barney Frank and Nancy Pelosi as well… and the last time I checked neither of them was black.

No, I hate Barack Obama because it is his goal is to destroy that thing I hold most dear: the United States. The United States is indeed an imperfect place, but so too is every other place on this planet. It has however created more prosperity and improved the condition of man more than any other nation in human history. And the biggest part of that success was the driven by the free market system – imperfect as it may be – and its companion individual freedoms.

The United States is not just a geographic land mass sitting between two oceans. There are 200 plus other countries around the world that can be defined by lines on a map. None of them is anything like the United States. They may share some traits with us, but America is a different animal altogether. While you may very well hear someone saying they want to move to France or Germany, you don’t hear them saying “I want to become French” or “I want to become German”. They can move to France, they can become a French citizen… but they can’t become “French”. That has never been the case with the United States. For centuries people have dreamed of coming to America and becoming an American. That is because for most of our history the world understood that America was a place where, regardless of where you came from or what you started with, with hard work, they could achieve spectacular success, however they wanted to define it. For outsiders looking in and those born here, the American Dream was something of consequence, something to strive for, something worth sacrificing for. People like Cyrus McCormick, Andrew Carnegie, Levi Strauss and Madam C. J. Walker knew it long ago while people like Sara Blakely, Daymond John, John Schnatter, Cesar Millan and Mark Cuban know it today.

Unfortunately Barack Obama doesn’t understand any of that. While he talks about an American Dream, his American Dream is one where the nanny state of government swaddles the nation, suckles the citizens, gets to decide who wins and who loses in virtually everything, gets to arbitrarily define the rules, and gets to keep its thumb on every scale. At its foundations that is a misunderstanding of what made America more than just a geographic entity in the first place. America is not great because of government, it is great because of its freedom… economic and otherwise. America was not made great by agencies like the ICC or the SEC or the FDA, the IRS, the EPA or even NASA for that matter. No, America was made great by companies like GE and Ford and Carnegie Steel and International Harvester and Standard Oil and Rockwell, and Intel and IBM and Merck and Kelloggs and J.P Morgan and Sears and Delta Airlines and Microsoft and Disney and Turner and millions of other companies started by entrepreneurs and investors who risked much, and sometimes everything to do something worth doing and earn a profit while doing it.

But Barack Obama doesn’t understand that. He fundamentally misunderstands how and why businesses function – and truth be told… so do most liberals. He believes that businesses exist to provide jobs to employees. He believes businesses exist to provide tax revenue to the government. He believes that businesses exist to further his social agenda. He simply doesn’t understand that while businesses may do any or all of those things, in a free market businesses exist to generate profits for entrepreneurs and investors.

It is that disconnect that makes Barack Obama worthy of being hated. Not because he misunderstands the basic element of free market economics, but because he feels it’s his right to use the police power of the United States to wreck the most prosperous and powerful economic ecosystem the world has ever seen. From green energy boondoggles to stultifying regulation to excessive taxes to seemingly boundless spending on social programs, Barack Obama is systematically strangling the goose that has laid the golden eggs for over 200 years.

If you think the word hate is too strong, what else might you call it when you see a man who is leading the charge to push the United States into an economic tailspin from which we might never recover? America becoming an economic basket case the likes of Greece or Detroit would create a worldwide catastrophe, economic and otherwise that would destroy the lives of hundreds of millions of people, both at home and abroad. A man who is working to inflict that level of destruction on a nation is indeed worthy of being hated.

That doesn’t mean that I wish him ill however. On the contrary, I hope he lives another 50 years after he leaves office. If we’re lucky that will be long enough to allow him to observe how his imperious anti capitalist reign caused (hopefully) a reawakening of the American people to the fragility of freedom and prosperity, resulting in a wholesale dismantling of the regulatory leviathan he has championed. Now that would be a great reason to love him.

Big Business + Government... Why Wall Street records don't mean happy days are here again...

On Friday, the stock market, driven by record profits and a better than expected jobs report, - not to be confused with a good one - closed at its all time record high. Closing at 1,614, the S&P 500 closed up 148% from the low it reached in 2009. Not bad given that the economy is up a paltry 5.5% over that same period. Already the markets are up over 10% since the beginning of the year. There are a number of reasons for this.

One is the fact that the 500 companies represented the index have been reporting strong revenue and earnings growth, particularly among technology companies like Apple, Google and Facebook. Another factor is that the Fed’s money pump. The Federal Reserve has been pumping $85 billion a month into the economy since the beginning of the year, doubling the $40 billion a month it had been pumping in since 2010. By the Fed driving bond rates to close to zero, the stock market is the natural beneficiary of the dearth of competitive returns. Where else are investors going to put their money?

Then there is the economy. Last week the government announced that the unemployment rate had dropped 7.5% in March, down from a high of 10% in October of 2009.  Those jobs numbers sound great, until you look a little closer. The primary reason the rate is down 25% in 4 years is not because of job growth, but rather because so many people have grown discouraged that they have stopped looking for a job all together. Basically, since Barack Obama became president, 9.5 million Americans have simply left the workforce and as such are simply no longer counted. Had those people still been looking for a job - U-5, the rate would be 8.9%, which might not be such good news for stocks.

The reality is that while the stock market may be going gangbusters, the country as a whole is a different story. The simple reason is the stock markets, by definition, reflect the fortunes of big businesses. Currently, for a company to be listed in the S&P 500 it must have a market capitalization of at least $4 billion. That leaves out 99.9 percent of all companies in the United States, including the jobs engine: Small businesses. Small businesses create 64% of all new jobs, employ tens of millions of people and are the places from which large successful businesses emerge.

Basically Wall Street is heading for the stars while Main Street limps along. This is no accident. Two pieces of legislation clearly demonstrate the problem. The first is Obamacare. In 2009 it was passed despite the fact that a majority of Americans never favored it. How? Collaboration between the Democrat party and big business advocacy. Companies as diverse as General Motors, Wal-Mart and Pfizer pushed for the passage of the sainted Obamacare because they understood that the legislation would create a significant benefits for them. In many cases big companies like Wal-Mart understood that they could unload some of their costs on the public, or more importantly, they could saddle small business competitors with healthcare costs they could not afford. As competition dried up, up would go their revenue and profits…

Just as expected, Obamacare has resulted in small businesses hiring fewer workers or hiring more employees on a part time basis to keep below Obamacare’s 50 employee threshold. The most recent jobs report shows this shift to part time workers. The April report showed that the average workweek per employee in the US dropped by .2 hours. That is the equivalent of firing over 700,000 people. That larger number of workers working fewer hours means that small businesses are saddled with greater accounting, training and management costs while simply seeking to maintain their current productivity levels.

The second piece of legislation that showcases the big business / government cabal is the Internet Sales Tax bill, euphemistically called “The Marketplace Fairness Act”. The legislation would force online retailers to collect sales taxes for every taxing authority in the country whether they have a presence there or not. Simply put, state and local governments cannot live within their means and seek to squeeze every dollar they can from largely defenseless small businesses. Big businesses meanwhile seek to kneecap potential competitors by foisting upon them regulatory compliance costs they simply can’t afford. A small business doing $1.5 million a year selling backpacks or tee shirts will typically not be able to keep up with the 9600 different taxing authorities that exist around the country. Although the legislation requires each state provide one clearinghouse for tax collection within its domain, it will still leave small businesses open to legal jeopardy from each of the 9600 local taxing authorities.

Here’s just one example. Have you ever looked at your grocery store receipt and noticed some items have a T beside them while others don’t? The ones with the T next to them are taxable and the others are exempt. Some jurisdictions tax staples like milk and eggs while others don’t – and each is constantly shifting the rules. Some communities exempt some forms of chocolate while exempting others. How is a small business selling gift cheese from Wisconsin supposed to understand if it’s fine cheeses count as untaxed staples or taxed luxuries in 9600 different jurisdictions with 9600 different sets of rules? If complying with that law sounds daunting, it is, and that is exactly why many big businesses, including Amazon.com are supporting it: Less competition = more profits.

At the end of the day this stock market bonanza should not be seen as a sign of a robust economic revival. Unfortunately it’s more like a pig wearing lipstick. It’s the result of governments who refuse to live within their means conspiring with big businesses who seek to eliminate competition. The hapless saps caught in the middle are the American worker, who has fewer employment opportunities, and the nascent entrepreneur who finds that maintaining or starting a business is simply becoming unsustainable or impossible. We expect that from government, but it’s a sad day in America when two shining beacons of free market success like Wal-Mart and Amazon embrace the antithesis of free markets – regulation – in order to undermine the opportunity for other entrepreneurs to enjoy that same success they achieved.

Can A Nation Built By Giants Survive Nanny State Paternalism? The Numbers Don't Look Good...

While US Constitution and free market capitalism set the the foundations for American prosperity, it took a rugged, passionate, free people to build it. From George Washington to George Washington Carver to millions of other Americans, the United States was carved out a continent of forests that seemed to go on forever, fertile plains, vast mountain ranges and scorching hot deserts.  Over time American frontiersmen and settlers forged a country that seemed to have all of God’s blessings in abundance.

Conditions were rarely easy for most Americans throughout most of our history. Coal miners spent 12 – 16 hour shifts in dangerous coal mines in which they sometimes couldn’t even stand. Frontiersmen built a homestead and a farm out of a thick Appalachian forest while fighting brutal winters and a tenacious Indian population. Slaves toiled for years at backbreaking work during freezing winters and boiling summers. At the end of the 19th century over 50% of Americans still lived and worked as farmers, a far more dangerous job than most people understand. The industrial revolution brought sweatshops and drove a thirst for steel, trains and petroleum.

One sometimes has to marvel that America survived long enough to challenge the British for independence and then go on to grow and prosper (mostly) for over 200 years as it changed the world. Were the Americans who carved a nation out of a continent somehow so different than Americans today? Were the Americans who crisscrossed a continent with railroads, telephone lines and highways so different than Americans today? Were the Americans who won two world wars and sent a man to the moon so different than Americans today? Were the Americans who invented the mechanical reaper, air conditioning, vulcanized rubber and the microchip any different than Americans today? Not based on DNA they weren’t. But that doesn’t mean they were the same. While the DNA of the American people today is no different than that of the people who invented the elevator or the light bulb, the American people writ large certainly appear to be.

Go back a little more than one generation ago and it seems like Americans were something of another species. They appear to be relative supermen. In 1970 there were 78 million people working in the United States. At the same time there were 1.5 million people on Disability Insurance. That means that one person out of every 53 workers was on Disability. Fast forward 4 decades and it seems as if the world has turned on its side. By 2012 the number of Americans working had risen by 82% to 143 million people. During that same period however, workers receiving disability insurance skyrocketed up 491% to 8.8 million. Today, instead of one out of every 53 workers being on disability, it’s one in sixteen! That number is particularly interesting because the United States of 1970 was a far grittier place than the United States of 2013.

First off, the United States in 2012 is a much different workplace than the one that existed in 1970. In 1970 fully 25% of the American workforce worked in manufacturing while only 30% of employees worked in the service industry. Today, less than 10% of the American workforce works in manufacturing while over 50% of workers work in the service industry. Given that designing a website, taking an order at Red Lobster or greeting a guest at the front desk of a Marriott is generally less dangerous than welding together various pieces of a Lincoln Town Car or operating a blast furnace at a USX steel plant, America should be a safer place to work. And indeed it is. The death rate for American workers in 1970 was 18 per every 100,000 workers. By 2010 that rate had dropped to 3.6 deaths per every 100,000 workers, a decline of 80%.

But of course work is not the only place where one gets hurt. Today, virtually everywhere Americans go everything seems safer. Cars have seatbelts, antilock breaking systems and a plethora of airbag options. Houses have GFCI circuit breakers in bathrooms and kitchens and smoke detectors in almost every room. Lawn darts are but a distant memory and towns across the country require helmets for bicycle riding and virtually every appliance and medicine comes plastered with book length warning label. At the end of the day, America has become a far safer place to live and work than it has been at any time in its history.

Somehow, however, despite that much safer America, the number and percentage of people listed as disabled and receiving disability payments has skyrocketed.

“ Since the economy began its slow, slow recovery in late 2009, we’ve been averaging about 150,000 jobs created per month… In that same period every month, almost 250,000 people have been applying for disability.” So the world has changed so much that Americans are now seeking disability benefits at a 60% faster rate than they are getting new jobs! That is a staggering statistic.

How is that even possible? Have Americans become weaklings, unable to stay healthy. Has some unknown affliction made us incapable of working? No. There is an affliction, but it’s not biological. It’s called the nanny state. From judges who rubberstamp virtually every claim they ever see to 34% of applicants who have musculoskeletal injuries, which conveniently enough cannot be detected by doctors, to outright fraud (more)(more)(more) and states seeking to shift costs to the federal government, the program is a symbol of much of what is wrong in America in 2013. Indeed, in some places 1 out of 4 workers (or former as the case might be) is on disability.  The worst thing about this dysfunctional program is that the fraud keeps people who are in real need of help waiting in line, sometimes to die.

When government decides to play the role of caretaker and redistribute wealth from workers to everyone else, it should come as no surprise that many people will choose to jump from the working pool to the everyone else pool. For more proof just look at the food stamp program over the same 40 year period. While the population increased by about 30%, workers by 82% and disability by 491%, food stamp recipients grew by 1,000%!

The economics of the welfare state, including the “disability industrial complex” cannot be sustained. If the record of the last 40 years were to be repeated over the next 40, in 2050 the country would have 260 million workers supporting 43 million people on disability and 450 million people on food stamps. Those numbers are simply not sustainable, but you wouldn’t know it by the administration’s push to get more people to apply for benefits.

American workers and entrepreneurs have together created the greatest wealth and prosperity the world has ever seen. At some point the spirit that helped forge a nation out of a continent and dot it with jewels like the Empire State Building, the Hoover Dam and the Golden Gate Bridge will reemerge and shout “I’ve had it and I’m not going to take it anymore!” American shoulders may indeed be broad, but the head which sits above them is not suicidal. At some point Atlas will shrug, the question is will it be in time to save the country…

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?

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.