January 2009

Can’t Anybody Here Play This Game?

by Bill O'Connell on January 31, 2009

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President Barack Obama

“Can’t Anybody Here Play This Game,” is what Casey Stengel reportedly said while watching his team, the New York Mets.  The same could be said of the Democrats when it comes to paying taxes.  The Democrats are the ones who rail against tax cuts for the rich.  They don’t believe in lower tax rates to stimulate the economy, but if these wealthy Democrats find taxes problematic, they just don’t pay them.

We now hear of another nominee, Tom Daschle, former Senate Majority Leader, has a $140,000 tax problem. $140,000! Most Americans would like to make that in income, let alone owe that in taxes.  This follows on the heels of Treasury Secretary Timothy Geithner paying back taxes of $34,000 and Charlie Rangel, Chairman of the House Ways and Means Committee that writes the tax laws, paying $10,800 in back taxes.  We’d probably have a balanced budget if all these rich Democrats only paid the taxes they owe rather than fighting against tax cuts for everyone.

Here’s Daschle’s excuse for his tax problem:

“Mr. Daschle told committee staff that he had grown used to having a car and driver as Senate majority leader and didn’t think to report the perquisite on his taxes, according to staff members.”

Two things come glaringly into view here.  First is the overall arrogance that these “public servants” feel they deserve privilege.  They have no concept that in the real world not everyone has a car and driver provided by their employer. In this case the employer is all the Joe Sixpacks out there.  The second thing is that these problems were discovered and fixed, in the cases of Daschle and Geithner, only after they were nominated for positions in Obama’s cabinet.  So, what if they weren’t nominated?  Do you think that this tax revenue that is legally owed to the government (you and me) would still be in their pockets?

We have the chairman of the committee that writes the tax laws failing to pay his taxes.  We have the Treasury Secretary who oversees the Internal Revenue Service failing to pay his taxes.  We have the former Senate Majority Leader who ran the senate that passes all laws failing to pay his taxes.  Do you think it’s too hard to figure out how to comply with our tax code?

It’s time to scrap the tax code and go to a simple flat tax that you can file your return on a post card.  Let’s put the $200 billion that Americans spend each year on tax compliance back into the economy.  Let’s make sure that all these rich Democrats pay the taxes they owe.  Do these two things and we probably won’t need a stimulus package.

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Man Up, Barack!

by Bill O'Connell on January 30, 2009

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President Barack Obama, took office with historically high approval ratings.  Congress ended its last session with historically low approval ratings.  So why is Barack Obama, the head of the Democratic Party, taking a back seat on the economic stimulus bill while Nancy Pelosi calls the shots?

President Obama campaigned on ending the divisiveness in Washington, as did George Bush, but bipartisanship is far more than dinner parties with conservative columnists, cocktails with leaders of Congress, welcoming ideas from Republicans that will eventually be ignored by Speaker Pelosi.  If bipartisanship was one of your themes, pay attention, there was bipartisanship on the stimulus vote, it was bipartisan opposition.

Taking family planning and some sod for the Washington Mall out of the package, does not magically turn this turkey into a stimulus.  It’s time for President Obama to do some arm twisting within his own party or his critical first 100 days will be a flameout.  Take a lesson from history, Presidents Carter and Clinton both took office with large Democratic majorities in Congress and tried to please them and neither could.  Clinton had a Republican Congress two years later and ended up with a pretty successful presidency.  Carter didn’t.

It’s your administration Mr. President, don’t let Nancy Pelosi snuff it out.

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Obama Introduces New Interrogation Methods

by Bill O'Connell on January 29, 2009

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With the closing of Guantanamo and the need to restore America’s image in the world, President Obama has condemned the use of torture in the war on terror.  This has brought about a collective sigh of relief from our troops who feel they will now be treated more humanely if they are captured now that the enemy knows we have abolished, after three uses,   waterboarding to interrogate prisoners.  Osama bin Laden has released a directive to his followers that in a show of good faith that all swords used for the purpose of beheading infidels shall from this day forward be clean and sharp.

The new interrogation methods are introduced here. You Tube — Interrogation Methods Demonstrated

We can all sleep more soundly tonight

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All Those Opposed Say — Nay

by Bill O'Connell on January 28, 2009

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The vaunted stimulus package is heading for a vote in the House. It’s time for Republicans to lay it on the line and by that I mean they should all vote against it. Sure, if they do the media will come at them, guns blazing:

  • “It’s the same old partisan politics”
  • “They’re listening to Rush Limbaugh”
  • “They are not giving the new president a chance”
  • “They are going against the historic moment by trying to deny our first African American president his right to govern”
  • “They’re just a bunch of racists”

But here’s how it should play out.  If this bundle of Democratic handouts will really fix the economy, then let the Democrats carry the ball.  They have the President, the House of Representatives, and the Senate.  They do not need any Republican votes to carry it, and the Republicans should not filibuster it.  If it doesn’t provide the promised stimulus, it will be entirely their responsibility and they will have to face the voters with that record in 2010.

If the Republicans sign on, in the “spirit of bipartisanship”, and it succeeds, Obama and the Democrats will take all the credit, because they control Congress and the Presidency.  If it fails, they will say that Republicans also voted for it, so re-elect me because we tried and we will keep on trying.  It’s heads the Democrats win, tails the Republicans lose.  This is not a stimulus package, it a package to consolidate Democratic power.

This package rewards those groups that helped elect Obama and the Democrats.  There’s money for:

  • Hollywood
  • Education (read teachers unions)
  • National Endowment for the Arts
  • Bicycle paths
  • Birth control

Does anyone know how these things will stimulate the economy?  The purpose of this plan is to reward those who helped elect the Democrats to make sure they stay on board for 2010.  Find more groups to give handouts to so they will also vote Democratic.  Once they have a lock on power, they can wait forever for the economy to finally correct itself.  If the Republicans question that, the Democrats can point to the Roosevelt administration and how long it took to end the Great Depression.

If, however, the Republicans stand firm then the Democrats will soon realize they are standing naked with this blatant goody bag for their supporters.  The do not want to have all the responsibility for this if it fails, and based on what’s in there it will.  So they will retreat to the drawing board and work with the Republicans to craft something that will actually work.

If this is the administration of hope and change, why do they have to reach back 85 years for ideas on how to deal with the economy?  Many of the things they are pushing are the very things that did not work then.  The way out of this morass is to cut taxes, increase the money supply, and shrink the government, maybe not immediately, but as soon as the economy starts moving.

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Dumb and Dumber

by Bill O'Connell on January 27, 2009

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The government decides that we have no choice but to bail out the automobile companies.  Before taking office Obama supported the bailout.  In my humble opinion, I believed the auto companies should have turned to the bankruptcy courts.  Now, President Obama is clearing the way for states such as California to significantly increase mileage standards for cars.

So let’s examine this.  The big three are forced to sell a lot of small cars at no profit or a loss for each profitable vehicle like a Cadillac they sell so that their fleet average fuel economy will meet CAFE standards.  The result of this government meddling is that the big three are unprofitable, so they have little or no money to invest in the next generation of cars.  Because they are on the brink of insolvency, the government steps in and bails them out with billions of taxpayer dollars.  Even with that, it may not be enough and the auto companies may require more.  So what does our government do now?  It opens the door for states to tighten the noose around the necks of the auto companies by increasing the mileage standards.

So now the auto firms will have to sell even more small cars at a minimum profit or loss for each profitable Cadillac they sell, in a down economy no less, practically guaranteeing that the auto companies will come back to the government asking for even more bailout money.

The inexperience display goes on in Washington.  How long can we stand it?

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Taking the Lead

by Bill O'Connell on January 26, 2009

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Upon taking office, what the President does as his first action often sets the tone of his presidency, indicating what he thinks is important.  Bill Clinton chose to wade into the debate on gays in the military.  Of all the things of importance to the country that he could have chosen to work on first, that was his pick.

President Obama chose to close down Guantanamo Bay, saying we needed to restore our image in the world.  It seemed to matter little to him that under President Bush we had gone over seven years without an attack.  Shortly after that he quietly signed another order that struck down a Bush administration ban on giving money to international groups that performed or provided information on abortion.

So let’s look at these two together, since they were both done in Obama’s first week in office. To restore the United State’s moral leadership in the world, we need to go easy on terrorists and fund the killing innocent unborn babies.  Evil gets a pass, innocence gets snuffed out.  Are we feeling more proud yet?  Are we holding our heads higher?

There is a consistency there, in that these terrorists have no problem strapping bombs on themselves, wading into a crowd of innocent men, women, and children, blowing themselves up and taking as many innocents with them as they can.  So protecting these people, and not making them uncomfortable while interrogating them, even if it would spare innocent lives, is somehow against our principals?

The point could not have been driven home any more starkly than by Nancy Pelosi when talking about the economic stimulus package making its way through Congress said:

Speaker of the House Nancy Pelosi boldly defended a move to add birth control funding to the new economic "stimulus" package, claiming "contraception will reduce costs to the states and to the federal government."

So now we know, abortion stimulates the economy.  How long before we can hear Joe Biden tell us, “C’mon, do your patriotic duty, pay more taxes, have an abortion, we’re in an economic pinch here.”

When the founders wrote about “Life, Liberty, and the Pursuit of Happiness,” life is what they put first, liberty, which really means smaller government, they put second, and the Pursuit of Happiness third.  I don’t see how you can square that with Life for terrorists, death to babies, more government and more taxes.

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Screaming Inexperience

by Bill O'Connell on January 23, 2009

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Guantanamo

In less than one week the lack of experience of Barack Obama, that the media chose to ignore, was on radiant display this week.  His two executive orders, one, to close Guantanamo Bay, and two, to only interrogate enemy combatants as per the Army Field Manual, began the process of compromising our safety.

Today’s New York Times carries a story about a Saudi, who was released by the U.S. from Guantanamo is now a deputy leader of al Qaeda’s Yemeni branch.  He was suspected of involvement in the deadly bombing of the U.S. Embassy in Yemen.  He was released to Saudi Arabia to go through a rehabilitation program in that country before being released.  He is back on the front lines, ready to kill Americans.

So what is the president’s plan?  He doesn’t have one. Over the course of the next year, he’ll get back to us with whatever plan a commission or a committee recommends.  Maybe it was a political bone that he felt he had to throw to the left to keep them at bay.  Speaking of hope….

Interrogation

After more than seven years where President Bush kept us safe, President Obama rushed to put us at risk.  He abolished the practice of aggressive interrogation.  Now the enemy with whom we are engaged has no qualms about decapitating a prisoner (Daniel Pearl), no concern about torturing people and hanging the remains from a bridge for all to see (Blackwater contractors), and has one objective, that is, to see us all dead.  How do you negotiate with someone whose only demand is that you die?

The techniques used in very rare circumstances, were thoroughly reviewed and legal opinions issued that permitted their use.  Information was obtained that saved lives.  But now, the CIA has a much harder job to keep us safe.  In the Clinton administration the FBI was prohibited from sharing information with the CIA and vice versa.  Over 3,000 Americans died when those two agencies could not share information and connect the dots.

It was encouraging to hear President Obama in his inaugural address say that this enemy will be defeated.  But to follow it up by closing Guantanamo and taking an important tool away from the CIA.  You can almost envision Osama bin Laden, sit up in his cave and smile and say, “Just like Clinton.  The paper tiger is back.  Now is the time to strike and the dog will run with its tail between its legs just like in Somalia.”

I hope not.  This is not the change we were waiting for.

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Let’s Have a Recovery Pizza Party!

by Bill O'Connell on January 23, 2009

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The tax cut side of the Obama stimulus package relies on what will be $500 per individual and $1000 per couple.  Do you remember the stimulative effect of the $300 tax rebate of 2008?  If you think about it, it comes out to about $10 per week for an individual and $20 per week for a couple.  Here in New York that will get the lovely couple a pizza pie, some soda, and a couple of dollars change.  Wow!  I can see the hiring binge that the pizza parlors, the sauce and cheese vendors, and the cardboard box makers will embark upon.  We should have 4.1 million new jobs in no time.

But the class warfare crowd just can’t bring themselves to admit that the elimination of the capital gains tax, and an across the board tax rate cut is the best way to stimulate the economy, because some people who are wealthy might get a tax cut when they’re the people we’re supposed to be soaking.  As for me, I much prefer the rich to put their money in play, rather than give it to the government to spend as those bureaucrats see fit.  I just don’t think they are that good at it.

What do you think?

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One More Change

by Bill O'Connell on January 16, 2009

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“When the incoming Democratic president asked the outgoing GOP president to request the second $350 billion in rescue money, Mr. Bush graciously complied. At which point the Democratic majority informed the Democratic president that he’d see not a dime until they decided how to spend it.” — WSJ 01/16/2009

If Barack Obama wants to continue to be the “anointed one,”  and if he wants to achieve and maintain rock star status, just like his Democratic predecessor, Bill Clinton, he should take another look at Clinton’s history.

If he wants to have a truly successful presidency, he better go get himself a Republican Congress.  If you look at a graph of the performance of the economy during Clinton’s term, you will see that the first two years were pretty lethargic.  But in 1994, the Republicans took over control for the first time in 40 years, and the economy took off, with Bill taking all the credit.  The last president to have a Democratic Congress during his entire tenure was Jimmy Carter, and we all know how that turned out.

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Do You Feel Stimulated?

by Bill O'Connell on January 15, 2009

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Speaker Nancy Pelosi has released a draft of the proposed stimulus package that is now standing at around $825 billion.  It didn’t take too long to grow $50 over what Obama was asking for (read draft here).  Needless to say, that in order to get bi-partisanship off on the right foot, she had to make sure to give Bush a parting shot by indirectly blaming him for the current crisis (“Since 2001…” gee, who began their presidency in 2001?).  I also found this statement curious:

The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we are warned that unemployment could explode to near twelve percent. With passage of this package, we will face a large deficit for years to come. Without it, those deficits will be devastating and we face the risk of economic chaos. Tough choices have been made in this legislation and fiscal discipline will demand more tough choices in years to come.

The first interesting point concerns unemployment.  In Obama’s economic team’s analysis they said that with a stimulus plan unemployment would rise to 8% and without it, rise to 9%.  Pelosi is now saying it could explode to 12%.  Can we get on the same page, here?  Which is it?  The next point is that with the stimulus we will face large deficits for years to come, but without the stimulus the “deficits will be devastating and we face the risk of economic chaos.”  So we’re damned if we do, and damned if we don’t because Congress can’t keep themselves from spending more damn money than they take in.

But don’t worry folks, this time (really) there will be unprecedented accountability.  Do you feel better? I do.  After all, don’t we have Barney Frank to thank for making sure Fannie Mae was fically sound?  No?  Let’s recap.

  • In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie’s oversight. Mr. Frank dismissed the idea, saying concerns about the two were “overblown” and that there was “no federal liability there whatsoever.”
  • Two years later, Mr. Frank was at it again. “I do not regard Fannie Mae and Freddie Mac as problems,” he said in response to another reform push. And then: “I regard them as great assets.” Great or not, we’ll give Mr. Frank this: Their assets are now Uncle Sam’s assets, even if those come along with $5.4 trillion in debt and other liabilities.
  • Again in June 2003, the favorite of the Beltway press corps assured the public that “there is no federal guarantee” of Fan and Fred obligations.
  • A month later, Freddie Mac’s multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. “I do not think we are facing any kind of a crisis,” he said at the time.
  • Three months later he repeated the claim that Fannie and Freddie posed no “threat to the Treasury.” Even suggesting that heresy, he added, could become “a self-fulfilling prophecy.”
  • In April 2004, Fannie announced a multibillion-dollar financial “misstatement” of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that “I think Wall Street will get over it” if the two collapsed. Yes, they’re certainly “over it” on the Street now that Uncle Sam is guaranteeing their Fannie paper, and even Fannie’s subordinated debt.
  • By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. “What blocked it [reform] last year,” Mr. Frank said then, “was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don’t think there should be a Fannie Mae or a Freddie Mac.” What really blocked it was Mr. Frank’s insistence that any reform be watered down and not include any reduction in their MBS holdings.
  • In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, “I can ask Fannie Mae and Freddie Mac to show forbearance” in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding.

So, I for one am really glad that we will now have A Recovery Act Accountability and Transparency Board, to keep an eye on things.  Whew, I was concerned there for a minute.

What’s Included in the Package

  • Clean Efficient, American Energy
  • Transform Our Economy with Science and Technology
  • Modernize Roads, Bridges, Transit and Waterways
  • Education for the 21st Century
  • Lower Health Care Costs
  • Help Worker’s Hurt by the Economy
  • Save Public Sector Jobs and Protect Vital Services
  • Tax Relief

Clean Efficient, American Energy

“To put people back to work today, and reduce our dependence on foreign oil tomorrow.”  Wow, sounds like, Drill Here, Drill Now, doesn’t it?  Not a chance.  Oil drilling is no where to be seen.  After over 1 million signatures on a petition to tell Congress to stop blocking our ability to drill for our own oil, Congress agreed, until the election that is, and then nothing more.  Also, nothing about nuclear energy either.

What is included:

  • Reliable electric energy grid — $11 billion
  • Renewable energy loan guarantees — $8 billion
  • Renovations and repairs to federal buildings, including energy efficiency — $6.7 billion. Why are our federal buildings in such need of repair?  Why hasn’t Congress been maintaining them?
  • Local government energy efficiency block grants — $6.9 billion.  This is taking money out of the left pocket and putting it in the right pocket.  The federal government’s money comes from individuals and businesses in all fifty states.  Why do we send our money on a round trip ticket to Washington, only to have our local politicians grovel to get it back?
  • Energy Efficiency Housing Retrofits for HUD sponsored housing — $2.5 billion
  • Energy Efficiency Research and Development — $2 billion
  • Advanced Battery Loans and Grants — $2 billion.  I’ve got a better idea.  Do you want to see innovation in battery and energy efficiency?  Eliminate the Capital Gains tax.  It will boost the stock market and bring in a lot more investment in new technologies
  • Energy Efficiency Grants and Loans for Institutions — $1.5 billion
  • Home Weatherization — $6.2 billion.  That’s $20 for every man, woman, and child in America.  Does every house in America need weatherization or is this a but much?
  • Smart Appliances (rebates for new appliances) — $300 million
  • GSA Federal Fleet (replace older vehicles with alternative fuel vehicles) — $600 million. Are they saying that today the Federal Government buys inefficient vehicles?
  • Electric Transportation (new grant money to encourage electric vehicle technology) — $200 million.  Did any of these politicians go to the Detroit Auto Show?  It was chock full of electric vehicles.  Didn’t we just give GM and Chrysler $14 billion?  Are we saying they need another $200 million for encouragement?
  • Cleaning Fossil Fuel — $2.4 billion
  • Department of Defense Research — $350 million
  • Alternative Buses and Trucks for state and local governments — $400 million
  • Industrial Energy Efficiency for demonstration projects — $500 million.  There are dozens of things we can do to improve Industrial energy efficiency.  We need demonstrations?
  • Diesel Emission Reduction — $300 million

That’s just the energy piece of the package.  With regard to the renewable and efficiency spending on government buildings, there should be a reduction in energy costs going forward.  Are the operating budgets for those buildings going to be reduced in future budgets to reflect the savings or is that money just going to be diverted to other uses?

It seems to me that we could get a lot more stimulus with some immediate tax breaks and if the problem with the economy is a lack of credit, perhaps loan guarantees is a better way to go.  Having the government pick winners and losers, or set dollar amounts on each of the slop troughs, just opens the door to lobbying, corruption, and mismanagement.  Who gets the money?  How is it determined? Who gets to decide?

Tax cuts are there for everyone.  As I have said many times, to me, many of our problems have been caused by the government.  The government is not the answer.

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