Tuesday, November 30, 2010

Private charity threatened by unrelenting
“Big Government” policies

Now that we’ve officially entered the holiday season we will be hearing more about the need for charitable giving. Surveys indicate, in fact, that over 50 percent of all donations to charity are made between Thanksgiving and Christmas.

According to, a personal financial Web site, Americans give about $300 billion to charities each year and are the most generous people on Earth. It would take three French, seven Germans or 14 Italians to equal the charitable donations of the average American, Mint tells us.

Americans voluntarily help their neighbors when they need it, and furthermore help people in need, anywhere in the world. They support causes they think are worthy, and it doesn’t matter that they do not have a lot to give; they give what they can.

A biennial survey by Bank of America of 801 households with an income greater than $200,000, or a net worth of at least $1 million – those that Indiana University’s Center on Philanthropy say account for about two-thirds of all individual giving – showed that average giving by survey respondents decreased significantly last year compared with 2007. Like everyone else, the wealthy were hurt by the economic collapse and had less to spend on charitable giving, among other things.

The Chronicle of Philanthropy reports that the 400 largest charities in the US saw a decrease of 11 percent in donations last year, the sharpest decline in 20 years of tracking donations. The larger organizations are still doing okay, but many smaller ones are feeling the pinch.

Into this already troubling scenario is that the Obama administration and the Democrats in Congress favor allowing the Bush tax cuts that reduced tax rates for all taxpayers to expire for just this one group of taxpayers. They would extend them for everyone else. The tax rate for those Americans would jump from 33 percent to 39.6 percent, leaving much less money for them to use for charitable purposes. And if that isn’t a serious enough problem, the Obama administration further wants to decrease the charitable deduction and the real estate tax and mortgage deductions for these same households from 35 percent to 28 percent.

These changes are estimated to decrease charitable giving by about 2.1 percent, which in 2006 (the last year for which data are available) meant a loss to charities of almost $3.9 billion, according to the Center on Philanthropy. This would deter the efforts of the most generous Americans to do what they want to do, and what should be done, which is to share their wealth with those in need by donating to charitable organizations that help needy Americans.

Rick Dunham, President and CEO of the strategic consulting company Dunham & Company, explains in practical terms what these changes really mean: “If the Obama plan stays as is, the tax burden of an individual owning a small S corporation with [total] taxable income of $250,000 would jump from 33 percent to 39.6 percent, or $16,500, which is 6.6 percent of the household income and close to the average of what these households now give to charity – $20,500.” Did you get that? Their tax would increase almost as much as the average amount they give to charity.

Over the last several decades we have seen the federal government spend more and more of our tax money on problems that are the traditional focus of private charitable giving. Before government in its infinite wisdom decided that it could do a better job taking care of people in need, private charity took care of these social problems. Since government got involved, the problems have multiplied; there are more people receiving government “charity” every year.

But government charity is not real charity, which is the willful giving of one’s own money to needs of one’s own choosing. What government does is take money from the people by force and use it for the purposes that the politicians deem appropriate, and that frequently means putting money where it does the politicians the most good.

This system pays government employees to collect and redistribute the money, increasing both the size and cost of government, and wasting billions on salaries and other costs that charities would use directly to address community needs. It diminishes real charitable giving by robbing people of their means of supporting the needs they see in their communities, and it replaces the people’s judgment of the problems needing attention with government’s judgment.

Think about charities that you know and donate to because of the good work they do. Ask yourself if your community will be better off if these organizations have less to operate with than in years past, or perhaps can’t continue to operate. Ask yourself if government really does a better job of addressing the needs of your community than these organizations, supported by your charitable contributions.

Getting government out of the “charity” business would reduce the size, cost and power of the federal government, eliminate billions in taxes and spending, and return control of more of your money to you to support organizations that are more efficient at addressing these problems than government.

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Tuesday, November 23, 2010

Washington apparently didn’t get
the message of November 2nd

There are so many fertile topics these days that it is difficult to pick one. There’s the idiotic, PC driven airport security process; there’s the earmark spending methodology that wastes billions of dollars each year; there’s the jeopardy our government has put our economy in; the manic push for government to be in charge of everything; the out-of-control Environmental Protection Agency; there’s the dangerous healthcare reform bill; the failure of elected representatives to get the message from the voters on Nov. 2; the Federal Reserve wrecking our currency; to name a few. Where to begin?

Let’s begin with earmarks.

Getting rid of earmarks as Republicans have pledged is a good idea, even if doing so will not actually reduce the budget, as defenders of the practice are quick to point out. But that isn’t really the purpose of banning earmarks in the first place.
Earmarks are specific allotments of budgeted spending designated by members of Congress for their pet projects that amounted to about $16 billion this year. That is equal to the median federal income tax paid by 6.9 million Americans.

The purpose of the earmark ban is to restore integrity and transparency to the spending process, and to eliminate political pork traveling from individual lawmakers to their districts and states. It is an incestuous process that mostly benefits the lawmaker responsible for sending home the bacon, and those few who get the benefit of the pork.

When Congressman Fatback earmarks $1.5 million for the Boss Hog Library in Podunk, California, as he promised the state library commission in return for their campaign support, or Senator Porker earmarks $700,000 to study swine blight in Kentucky in return for the support of everyone with blighted swine on their farm, they are spending your money for the benefit of a few of their constituents. These expenditures are not subjected to debate by their colleagues in the Congress, or to the scrutiny and oversight of the public.
Congresspersons will be more likely to vote for a bill that contains their earmarks than they might otherwise, and earmarks are not infrequently offered to members to entice them to vote for a bill they otherwise might not vote for. Arizona Republican Rep. Jeff Flake calls earmarks “a gateway drug to a spending addiction. Once you have an earmark in a bill,” he said, “you feel obligated to vote for it, no matter how bloated it becomes.”

If a project in a particular Congressional district or state is really in the national interest, should it not be publicly debated before being approved by the Congress, not slipped through under the table? And, the larger question is if Congress can’t control its earmarks spending addiction, how will it ever deal with very serious problems like Social Security and Medicare?

And then there’s the EPA.

It is difficult to determine whether the Justice Department or the Environmental Protection Agency is the most heavily politicized of this administration’s departments and agencies, but my vote goes to the EPA.

Kyle Isakower, vice president of regulatory and economic policy at the American Petroleum Institute, compared the Obama EPA with the Bush EPA. In the first 18 months of the second Bush administration, he notes that the EPA proposed 16 significant regulations, or regulations that have an annual economic impact of $100 million or more. That was a lot of regulation, but the current EPA has proposed 42 such regulations in its first 18 months, nearly three times what the Bush EPA did.

The EPA’s blindly ideological bureaucrats seem to believe they can do whatever they want in pursuit of their environmental goals, as if they are autonomous and omnipotent. One instance of this tendency is increasing the amount of ethanol in gasoline by half, from 10 percent to 15 percent, even before testing has been completed on E15 fuel, and in the face of evidence that this increase may have substantial negative consequences.

Another example is the EPA rules regulating greenhouse gas emissions (GHGs) under the Clean Air Act that are scheduled to go into effect on Jan. 2, 2011. What the agency is doing is changing the law, something government agencies do not have the authority to do; only Congress can do that.

The EPA is under control of environmental zealots who are bound and determined to implement draconian policies and regulations with little if any regard for the effects those mandates have on the economy and the people they serve.

Parents sometimes must force their children to do something they don’t want to do because it will ultimately be good for them. Perhaps what the EPA wants to force on us will ultimately be good for us, or perhaps not.

But the federal government is not our parent, it is our servant. And it can neither make us do what we do not want to do, nor refuse to do what we want done. In the United States of America, the people are in control of the government, not the other way around.

The violation of this fundamental rule is evident in both the earmark issue and the behavior of the EPA.

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Tuesday, November 16, 2010

Treating business as the enemy
costs jobs and economic growth

As President of the West Virginia Chamber of Commerce, Steve Roberts is the leader of the organization that is most concerned with businesses in the state, and he understands what so many of our leaders do not: that business is the driver of economies at all levels. He knows what is impeding business development in a state that has the reputation of being unfriendly to business.

Speaking to a meeting of the Rotary Clubs and the Chambers of Commerce of Bluefield and Princeton, West Virginia, Mr. Roberts presented a litany of negative data underscoring the state’s problems in the areas of health, education and the economy, some of which are directly linked to the state’s business environment.

In education he said that West Virginia ranks 50th for residents with college degrees. That might be because most West Virginians either don’t go to college, or don’t complete a degree program. Or, it might be due to the fact that most of those with a college education left the state because they were unable to find meaningful work due to the state’s business environment.

Where the economy is concerned, the link is much clearer. The state is 47th in the United States for per capita income and 49th for per capita GDP. It ranks 2nd for the percent of its population receiving Food Stamps, 4th for the percentage of children living in poverty, and 2nd for projected population loss through 2020. Other states that have better business climates have more jobs available for their citizens and more jobs that pay well, and outperform the Mountain State.

Mr. Roberts believes being unfriendly to business has cost West Virginia a staggering 80,000 manufacturing jobs since 1979 when approximately 130,000 West Virginians were employed in manufacturing operations. Those jobs didn’t go to Asia, and didn’t leave because of NAFTA he said, they were lost to neighboring states that were and are more business-friendly. And he noted that neighboring Kentucky had gained about 80,000 manufacturing jobs during that same period.

While neighboring states managed to grow their manufacturing base West Virginia increased workers compensation costs, increased the risks employers face from lawsuits, and increased taxes. “We simply said to the people who made the biggest investments and hired people at the best wage levels, ‘we’re not shaping our policies to make you welcome here,’” he said.

According to Mr. Roberts the state’s problems lie primarily in three areas: Taxes, the electoral system, and the legal system.

He said the state inordinately taxes employers with the fourth highest corporate tax per capita and the second highest insurance premium tax in the US.

West Virginia’s electoral system is one of only a handful that allows straight-ticket voting, and only Michigan has a higher percentage of straight-ticket voting. It is one of only seven states whose entire judiciary is chosen in partisan political elections.

West Virginia’s legal system has earned the reputation of not providing everyone a fair trial at all times. Mr. Roberts pointed out that West Virginia is the only state that doesn’t have automatic right of appeal for punitive damages awards, has the lowest threshold for bringing deliberate intent lawsuits against employers, is the only state that allows medical monitoring payments to claimants with no proof of injury, and is one of only four states that has not seriously limited some combination of punitive damages, joint and several liability, and collateral source rules. He noted that in 2007 three of the seven largest jury verdicts in the world were rendered in West Virginia.

He said, however, that changes are under way. The workers compensation system, long a deterrent to business, has been privatized, lowering costs by 40-percent, and the business franchise tax is headed for gradual elimination. Recent news reflects that the state is producing jobs faster than the US as a whole, but it has a long way to go to become attractive to business.

In many ways, West Virginia is a microcosm of what is wrong with the United States.

For the first 140 or so years of its existence the United States was a bastion of personal freedom, protecting the opportunity for its citizens to do pretty much what they wanted to do, an essentially free-market economic system that enabled America to develop into a globe-leading force that produced new and better products and systems that were the envy of the free world.

Over the last century encroachment by government into private sector activity has punished business through high taxation and excess regulation, and dampened the creation of wealth that made the US the most prosperous nation in the world.

Don Watkins and Yaron Brook, writing on, inform us that the “economic system fully geared to the life of producers is complete, unregulated, laissez-faire capitalism – a total separation of state and economics, where the government protects each individual's inalienable rights, including his rights to property and to freedom of contract and trade, and otherwise ‘gets the hell out of the way.’ That's what it means to be pro-business.”

And getting government out of the way is how the US will grow its way out of the recession and restore prosperity.

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Tuesday, November 09, 2010

Voters sent a message on November 2nd,
but did Washington hear it?

Just how important was last week’s election? Well, a list of the damage includes Republicans picking up at least 63 seats in the House of Representatives, more than in any election since 1938, leaving Democrats with the smallest number in the House since 1946. Fifty incumbent Democratic congressmen lost their races, including 22 freshmen, nine senior Democrats with 18 years or more in office, and three committee chairs.

Republicans also gained six seats in the US Senate, narrowing the Democrat majority.

The North Carolina General Assembly went Republican for the first time since 1870, and the Alabama Legislature turned Republican for the first time since 1876.

The Maine and Minnesota Senates flipped to Republicans, and the Texas and Tennessee Houses went from virtually tied to large Republican gains.

Both houses of the Wisconsin and New Hampshire legislatures flipped to the GOP by wide margins, and Republicans won governorships in Florida, Iowa, Kansas, Maine, Michigan, New Mexico, Ohio, Oklahoma, Pennsylvania, Tennessee, Wisconsin and Wyoming, all of which currently are run by Democrats, and the GOP won 23 of the 37 contests for governor, and will control 29 of the country’s 50 statehouses.

All those who decried the public opinion polls that pretty consistently predicted this result will have trouble ignoring the strong anti-Democrat message of November 2. Despite this result, there are still those who recognize that voters were angry, but completely misunderstand why they were angry and at whom their anger was directed.

President Barack Obama correctly called it “a shellacking,” even though he misunderstood why it had occurred. Initially, he attributed the walloping to people not understanding all of the wonderful benefits of the health care takeover, cap and trade taxes that will raise the cost everything under the sun, and other big government measures because the administration just didn’t communicate effectively.

Others on the left offered reasons such as “slower than expected job growth,” and “the economy didn’t improve fast enough,” but those aren’t the reasons behind this ballot box revolution, they are symptoms of the faulty liberal policies of the Democrats, and those policies are why people are upset. They arise from the belief that government is the answer to all problems, but their failure proves the fallacy of that belief.

However, while this reality escapes the big government politicians in both major parties, the people realize big government not only has failed, but is highly undesirable, and they are fed up with the current incarnation of the federal government: its size, its out-of-control spending and its increasing intrusion into their lives.

"It's very clear that nationwide we have a movement … a mandate to make sure the federal government gets reversed in its growth. Not just slowed down, but completely changed out in a way that we have increased power to the [states],” according to Alaska Republican Senate candidate Joe Miller.

Clearly, voters gave the GOP as good an opportunity as it could hope for. But how many Republicans also failed to get the message that Democrats so plainly missed? Will Republican incumbents in Congress transform from establishment politicians into true servants of their constituents? Do they understand that voters told them to re-establish limited government principles; to undo dangerous liberal policies?

Florida Republican Marco Rubio, who defeated the Democrat Governor running as an independent and a Democrat candidate to win the Senate seat, gets it: “We make a great mistake if we believe somehow these results are an embrace of the Republican Party; what they are is a second chance. A second chance to be what Republicans said they were going to be not so long ago.”

Senate Majority Leader Harry Reid said that “Republicans must take their responsibility to solve the problems of ordinary Americans,” and that saying “no” is not the answer. “It has to be ‘yes.’ Not our ‘yes,’ but a combined ‘yes,’ something we work out — a consensus ‘yes,’” he said.

Well, how magnanimously bipartisan of Mr. Reid. Had he been open to Republican input before, there is every possibility that some useful legislation would have been passed before now.

But Sen. Reid, President Obama and the other Democrats in Washington had better get a firm hold on the new reality, which is that voters screamed a message last week that they want changes in how their government operates.

They don’t like the dangerous stimulus spending, government takeover of banks and auto companies, the health care reform bill, and the way it was conceived in dark backrooms and jammed through without any Republican input or support, the proposed cap and trade bill that everyone except Washington Democrats realizes will further cripple the economy, and the general attitude among the political class that they know better than the people what is best for them.

The job Republicans were given is to save the country from the chaos that the liberal-controlled government produced, and to give the people what they want: a government based upon principles of smaller, less intrusive, constitutional government, and return to America the balance between the private sector and the public sector that enabled the country to grow and prosper.

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Tuesday, November 02, 2010

The campaign is over, now the work
to restore the country begins

Whatever happens today, how the country moves ahead is critically important. The US is wildly off track, which is why the tea party movement, so hated by and frightening to liberals, sprang up and has drawn so many everyday Americans to their rallies.

You sometimes see the term “tea party” as a proper noun, however, while there are formal organizations using that name, the tea party movement is not a formal movement, but a series of mostly independent groups who rally in support of a set of common principles, but are not part of a single national organization.

The tea party movement, despite the lies and distortions made up by its enemies and dutifully reported in the mainstream media, is not a bunch of extremists or a bunch of racists, or Nazis or nut jobs with nothing better to do with their time. Of, course, every group or movement will have a whacko or two in it, but the number of such radicals among tea partiers is infinitesimal. And there is the occasional left-wing plant trying to discredit the entire movement. But all of that has been blown out of proportion by the socialist/liberal/statist members of the ruling class and media who correctly see the movement as a threat to their power and control.

From those rather rare efforts by respectable news outlets to find out exactly who tea party folks really are we learn that the vast majority of them are moms and dads and grandmothers and grandfathers, military veterans, doctors, lawyers, electricians, plumbers, carpenters, housewives, police officers, fire fighters and other salt-of-the-Earth people. Many of them are white, but they are also black, Asian and Hispanic. They are people for whom political activism is a new thing, and many, perhaps most, of them have never attended a political rally before in their lives. They all see that their country is headed at high speed toward a ditch, but it’s a different ditch than the one in President Barack Obama’s little story he so frequently uses to excuse his administrations failures.

The President’s story omits that big government dug the ditch, built the road heading into it, and damaged the steering mechanism and brakes by excessive intervention into private sector activity. Some corporations took advantage of the contorted environment the ruling class imposed on them, and made a bad situation worse. Those corporations are not innocent of blame, but neither can they be given all the blame; they played the hand government dealt them.

No doubt some will quibble with that assessment, but an objective review of government actions going back to the Carter administration will bear that out. And that includes Congressional refusal to follow Bush administration warnings to clamp down on Fannie Mae and Freddy Mac starting back in 2001.

Among the grave problems that have driven the tea party folks to political protest, perhaps foremost in their minds, is the precarious level of spending and the insanely high national debt.

When George Bush left office at the end of 2008, he had increased the public debt by $2.5 trillion. The 2009 budget, created under Mr. Bush, but added to by Mr. Obama added $2.6 trillion to the debt, but Mr. Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016. That simply cannot be sustained.

Mr. Obama continually blames George Bush for the nation’s financial problems, but remember that Congress is responsible for budgets and spending, not the president, and Democrats have controlled Congress since January of 2007. Mr. Bush deserves criticism for not vetoing excessive Congressional spending, but Congress is responsible for the spending itself.

Tea party folks also realize something else that has escaped Washington liberals: that over-zealous regulation – 43 new major regulations in fiscal 2010 – is impeding the recovery and will cost taxpayers an additional $26.5 billion this year. And it’s not just rich people making more than $200,000 a year who will pay more.

It was during a long period of mostly free-market capitalism and relatively little government regulation that the United States rose to be the most prosperous nation on Earth, and today is the world’s only super power.

And so, whether today’s election produces a huge wave sweeping liberal Democrats out of office in sufficient numbers to give Republicans control of the House and the Senate, or whether it results in modest gains by Republicans and leaves one or both houses of Congress under Democrat control, the same course of action must be followed unless we want to see the United States diminish in prosperity and influence around the world, which would be a true tragedy.

That course is to restore sanit
y to government; to work to reduce spending, restore government to its Constitutional limits and scope, and get government out of the way so that the same American traits of ingenuity, hard work and risk-taking that built our country can be set loose to pull it out of the ditch that liberalism and leftist policies have driven it into.

This will require a new mentality in Washington, and constant pressure on our elected public servants.

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