Wednesday, September 28, 2011

Auntie Obama

This video is an interview by a Boston television station of Barack Obama's aunt, who is in the Unites States illegally.

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Tuesday, September 27, 2011

Paying their fair share, class warfare,
and “voodoo economics”

So breathtaking is the failure of some in Washington to understand and embrace simple economic principles that it defies rational explanation. For some of them it isn’t so much a matter of not understanding economics as it is subscribing to the principles of a different economic system, a non-capitalist economic system.

Elizabeth Warren is the former Obama administration consumer advocate who came to Washington from teaching bankruptcy at Harvard Law School to help the federal government create bankruptcy for private businesses. Ms. Warren was tabbed for formal nomination to that new position, which required Senate approval. Her ideas were so toxic with Wall Street, Republicans, and moderate Democrats, and drew such strong opposition from them, however, that President Obama instead appointed her as an adviser rather than submit her name in nomination. Ms. Warren has moved on from the administration and is now a Democrat candidate for the Massachusetts Senate seat won by Republican Scott Brown last year.

At a campaign event in Massachusetts in August, Ms. Warren attempted to refute the GOP charge that raising taxes on the wealthy amounts to "class warfare." "There is nobody in this country who got rich on his own. Nobody," she declared, which really has nothing to do with refuting charges of class warfare, but is typical of the far left; wanting credit for something they had nothing to do with.

"You built a factory out there? Good for you," she said. "But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did."

“Good for you,” she says, condescendingly, of the people who make the economy work, as she implies that paying income taxes that are used to build roads, fund police and fire protection, and educate kids is equal to building a factory and putting people to work. Furthermore, it isn’t as though the folks that built the factory didn’t also pay taxes to build roads, hire firemen and police officers and educate the young, and, by the way, pay taxes at a higher rate than whose ire Ms. Warren was so deliberately trying to arouse.

It doesn’t occur to her that by creating jobs in that factory the employer enabled the employees to feed their own family, buy clothes, cars, a house, take vacations and pay their own income taxes, if they happen to be in the half of the population that actually pays income taxes. She rejects the very real mechanics of our economic system, hoping to supplant it with a different one.

The Bush tax cuts that so disgust those who think like Ms. Warren cut tax rates for everyone, putting the lie to the “tax cuts for the rich” inanity that the left robotically spews. The Economic Growth and Tax Relief Reconciliation Act of 2001 lowered tax rates for all income levels, doubled the child tax credit from $500 to $1,000 per child, and eliminated the marriage penalty by giving a married couple filing jointly a standard deduction twice that of a single filer.

What she and others want to do, however, is to return only the highest tax brackets to pre-Bush tax cut levels, and that plainly does not treat everyone the same, as the Bush cuts did. That clearly targets one group of citizens for a special penalty, ergo: class warfare.

Of course, they can’t admit that they want to single out one group, so they simply deny the truth. But even the mainstream media is beginning to get wise to the “rich don’t their pay fair share” rhetoric.

The Associated Press: “On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.”

ABC News: “For the most part, the wealthy pay a significantly higher percentage of their income in taxes than middle-income workers.”

The Wall Street Journal: “But nearly all millionaires still paid a rate that is more than twice the 8.9% average rate paid by those earning between $50,000 and $100,000, and more than three times the 7.2% average rate paid by those earning less than $50,000.”

So, it is obvious that the “rich” actually do pay their fair share, or more, and it is clear that the fringe left truly is guilty of class warfare.

Imposing non-capitalist economic principles onto a capitalist economy has already caused serious problems, as in the mortgage banking collapse. The Marxist philosophy Ms. Warren prefers won’t work – can’t work – without a totalitarian government, like the former USSR, Communist China, North Korea or Cuba.

Freedom-loving people will tell Ms. Warren and her buddies firmly, “No.”

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Tuesday, September 20, 2011

Tinkering with the economy causes many more
problems than it solves

There is no shortage of economic troubles in America today: high unemployment, high corporate taxes, high fuel prices, rising home foreclosures, rising wholesale prices … the list is long.

Sometimes government’s role in these problems is obvious, like with taxation, because taxation is a direct action of government. Most of the time, however, government’s harmful role is less obvious. However, government tinkering is a common theme in the nation’s economic problems, whether it is through efforts of central planning or government picking winners and losers.

One way that government gums things up is through subsidies. A subsidy is defined as monetary assistance given to a person, group or entity in support of an enterprise regarded by government as being in the public interest.

For example, because government thinks that we should use much less oil for fuel to reduce pollution from burning oil products and to help reduce our dependence on foreign oil sources, it decided to dilute gasoline with ethanol made from corn. Slate online magazine, among others, sees problems with this: “Ethanol won't significantly reduce our oil imports; adding more ethanol to our gas tanks adds further complexity to our motor-fuel supply chain, which will lead to further price hikes at the pump; and, most important (and most astonishing), it may take more energy to produce a gallon of ethanol than it actually contains.”

Some of the results of this government-knows-best policy are: 1) forty percent of U.S. corn goes to ethanol production instead of the food supply, raising food prices, and 2) putting ethanol in gasoline creates a fuel that is less efficient than pure gasoline, requiring more gasohol to get the same result as pure gasoline.

It doesn’t take a rocket scientist to realize that when government is willing to pay people to do certain things, people are perfectly willing to do whatever will get them the money: when something is subsidized, you get more of it.

Subsidies given out by the government come in many forms, including housing loans, student loans, money or tax breaks to businesses and various types of support payments to individuals.

With the best of intentions, we subsidize not working through welfare, food stamps, Medicaid, unemployment insurance, etc. Helping people in trouble is a good thing, although it is inappropriate for government to do so, but if people can get free food, free health care, a free place to live, why work? Someone who has lost their job may be less motivated to take a less-than-perfect new job if they know they can get unemployment payments for 99 weeks. These subsidies often remove or substantially dull the incentive for people to have a job. In such cases the safety net becomes a hammock.

Neither should government subsidize so-called “green” energy. It is not within the federal government’s purview to decide what energy sources the country uses, or to give taxpayer money to preferred businesses.

Green energy sources like solar and wind are overly expensive and notoriously inefficient, so when President Obama went to California to announce a $535 million government loan to a solar energy company as part of his ill-conceived stimulus package, he unwittingly created what commentator Charles Krauthammer called “the most expensive photo op in history.”

Government inefficiency and poor judgment virtually guarantee that subsidies will fail to meet their goals, and not infrequently create horrible unintended consequences, like Mr. Obama’s glorious misadventure did. Solar panel maker Solyndra received the loan from the Obama administration in 2009, in part to hire 1,100 workers, and just last month the company shut its doors and announced its intent to file for bankruptcy. Those 1,100 taxpayer-financed jobs are gone, and worse, taxpayers have been placed in line behind other creditors to get their money back.

The company blamed current business conditions and a glut of solar panels for driving down the price of its product. If there is a glut of solar panels, that means the industry has produced more than it can sell. Maybe solar panels are not cost effective, or maybe they don’t do a good job of replacing conventional energy, and people see no advantage to investing in solar energy, despite the Obama administration’s best efforts to prop the industry up. It would be bitter irony, but perhaps subsidizing solar energy producers caused the glut of solar panels that brought down Solyndra.

So, in an effort to help a company that couldn’t survive on its own in an unproven and immature industry, the Obama administration sped up the loan process and granted the loan – a process that the Bush administration had suspended earlier in the year because the company was deemed unstable. Since Solyndra executives donated to the president’s campaign and repeatedly visited the White House, the Obama administration has a long list of questions to answer.

Whereas most government programs and subsidies are wasteful failures, this effort by President Obama to impose his ideological energy preference on the country is a colossal error. Investigations are looking into possible criminal and other improper activity.

Unfortunately, it is unlikely that this boondoggle or the history of failure of government subsidies will discourage continuation of this flawed process.

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Tuesday, September 13, 2011

President Obama reveals plan to create jobs:
the American Jobs Act

“I am sending this Congress a plan that you should pass right away,” President Barack Obama declared last week in his address to Congress. “It's called the American Jobs Act. There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that's been supported by both Democrats and Republicans – including many who sit here tonight. And everything in this bill will be paid for. Everything.”

His speech contained a list of proposals with broad appeal for the public and Congressional Democrats. But the bill he told Congress to pass umpteen times in the course of the address was nowhere to be seen, and may not even have been written. However, even the general concepts he set forth had glaring problems.

While Mr. Obama wants to fund things that are needed and useful, like transportation projects and infrastructure upgrades, these things provide short-term employment. The economy desperately needs to create long-term jobs, jobs that will be around many years hence, not jobs that last only several months. A bunch of short-term construction jobs, funded by government with money it doesn’t have, is a terrible plan.

“Pass this jobs bill,” he said, “and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job.” Sounds good, doesn’t it? But if a new job is going to last, it has to be in response to operations-related need, not government gimmickry. The average wage in the United States is about $50,000 a year, plus benefits. How many businesses of any size are going to take on that expense just to get a $4,000 tax credit?

The president seems not to understand that businesses do things for reasons related to their operation, and if something doesn’t make sense based on business factors, smart business people won’t do it.

He wants to extend the payroll tax holiday and keep the tax at 4.2 percent, rather than the normal 6.2 percent. “Pass this jobs bill, and the typical working family will get a $1,500 tax cut next year; $1,500 that would have been taken out of your pocket will go into your pocket,” he declared.

While this puts money back in the hands of the people who earned it – a good thing, to be sure – it is a temporary fix, and something everyone knows will end soon. It therefore has limited potential to make a substantive difference. But that isn’t the biggest downside. This proposal steals more revenue from Social Security and Medicare, two programs that are already drastically underfunded. Where will the money come from to offset this revenue loss?

Mr. Obama’s typically broad statements sound appealing, like this one: “By eliminating pages of loopholes and deductions, we can lower one of the highest corporate tax rates in the world.” Or this one: “We need a tax code where everyone gets a fair shake and everybody pays their fair share.” The concepts have great appeal, but the details create strong disagreement.

Taxing corporations at any rate forces higher prices that punish consumers, not the corporate bigwigs for which Mr. Obama has such disdain. But if he is serious he would fix the tax code so that it doesn’t encourage US companies to move jobs overseas, and keeps them from bringing corporate profits back home.

And where personal income tax fairness is concerned, the top 5 percent of taxpayers contribute 60 percent of government revenue, the top 10 percent contribute 75 percent of revenue, while half the U.S. population is now exempt from paying tax. Mr. Obama thinks that isn’t fair, and he’s right about that. But his solution is getting the wealthy to pay even more, to at last pay their “fair share.”

“Now it's time to clear the way for a series of trade agreements,” he said, that will make it easier for American companies to sell their products in Panama, Colombia, and South Korea. That’s true, but these three agreements were signed in 2007. Why wait until now to get Congressional action?

He also mentioned clearing out red tape in the regulatory process. Mr. Obama did right thing recently telling the Environmental Protection Agency to back down from new ozone standards it has been pushing.

That was reason to hope that at last he has realized that his ideological policies aren’t working and he now wants to try something different. Does this mean speeding up permits to drill our own oil and gas from the Gulf of Mexico, offshore, and onshore, and provide thousands of jobs and millions in government revenue?

By asking to address a joint session of Congress the president set the stage for something big. Mr. Obama really, really likes dramatic backdrops for his speeches. But using this setting to talk about a jobs plan raises expectations, and the substance of this speech fell well short of the hype.

He passed up a grand opportunity to announce changing course and removing government obstacles to economic recovery, and instead only offered more big government solutions like those that haven’t worked, and gave us a typical Obama campaign speech.

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Tuesday, September 06, 2011

Poll: Americans understand economy needs
domestic energy production

A Gallup poll in March reflected that Americans believe the nation should prioritize the development of energy supplies over protecting the environment when the two goals are at odds by a 50 to 41 percent margin. The survey included 1,021 adults 18 and older chosen by random-digital-dial sampling, with a 95-percent confidence level.

Most polls are just a snapshot in time, but this one reflects a four-year trend of attitude reversal.

In 2007, the segment that preferred protecting the environment even if it meant limiting energy production measured 58 percent of the sample, against 34 percent, and that percentage has been falling ever since, to 50 percent in 2008, then 47 percent, then 43 percent and now 41 percent.

Their strong preference for conservation of energy supplies over increased production has likewise fallen, from 64 percent pro-conservation and 26 percent pro-production, to 48 percent pro-conservation and 41 percent pro-production. However, the poll also showed a 66 to 26 percent preference for development of alternative energy over increased fossil fuel production over the longer term.

Boiling all of that down, it shows that Americans who participated in these polls over the last four years are pretty sensible people. They understand that current economic circumstances –stubbornly high unemployment, with no relief in sight, and GDP that is languishing at 0.4 percent in the first quarter of 2011, rising to 1.0 percent in the second quarter – require that the country stay with proven energy sources and increase domestic production at least until the economy recovers.

They realize that the country badly needs to create jobs and they understand that increasing domestic energy production will serve that purpose. Currently, there are substantial oil and gas resources that are off-limits, and the American Petroleum Institute believes that opening up access to them would increase both jobs and tax revenues, and has a study by Wood Mackenzie that backs that up. The study shows that 530,000 jobs and $150 billion in revenues would result by 2025 from loosening the restrictions on producing domestic energy. There is no impetus in the Obama administration to follow this course, however, and in fact it prefers heavy regulation, drilling bans and foot-dragging bureaucracy that have the opposite effect.

Most everyone understands that if we can meet our energy needs by burning less fossil fuel, we certainly should do so, a point reflected in the Gallup polling. However, for it to make any sense at all to change the balance between conventional and alternative sources, alternative energy must be economical and as effective as the fossil fuels it replaces. And that is where the problem with “green” energy lies.

That point is underscored by what happened in Texas during this summer’s heat wave, where the state’s wind turbines failed to perform adequately to combat the extreme heat. As explained by Robert Bryce, a senior fellow at the Manhattan Institute, writing for National Review Online, “Texas has 10,135 megawatts of installed wind-generation capacity, which is nearly three times as much as any other state. And yet, on [August 24], all of the state’s wind turbines mustered just 880 megawatts of power when electricity was needed the most. Put another way, even though wind turbines account for about 10 percent of Texas’s 103,000 megawatts of summer electricity-generation capacity, wind energy was able to provide just 1.3 percent of the juice the state needed … to keep the lights on and the air conditioners humming.” Climate reality: When the temperature rises, the wind slows down.

However, there is a good bit of positive news around right now, such as The Wall Street Journal’s report that “the U.S. Geological Survey said that Cook Inlet [Alaska] likely holds about 19 trillion cubic feet of undiscovered, technically recoverable natural gas—nearly nine times more than the last estimates, made in 1995—as well as 600 million barrels of oil.” Since natural gas burns cleaner than coal or oil, this discovery makes it possible to reduce the use of dirtier-burning fuels.

And the British Broadcasting Company reports that scientists say that there was a mysterious decline in the growth of methane in the atmosphere in the last decades of the 20th Century, and that human activities are a factor in the positive change in the levels of what is regarded as one of the most potent greenhouse gases.

“Researchers writing in the journal Nature have come up with two widely differing theories as to the cause,” the BBC reported. “One suggests the decline was caused by greater commercial use of natural gas, the other that increased use in Asia of artificial fertilizer was responsible.” At a time when science, sometimes corrupt science, tells us mankind is killing the climate, here’s science telling us we have actually helped it.

The Gallup poll shows Americans believe we need to focus on developing alternative energy to replace fossil fuels, but they also believe that in the current economic situation we need to increase development of domestic energy supplies to lower prices, increase energy independence, and to put thousands of oil and gas workers back to work. If only the politicians could figure this out.

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