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July 2010

The Harry and Barry Show

by Bill O'Connell on July 10, 2010

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Back on the campaign trail where he feels comfortable that he knows what he is doing, Barack Obama traveled to Las Vegas to stump for Harry Reid.  Harry Reid used to be a boxer and when he told Barack Obama this he said, “Barack, I wasn’t the fastest.  I wasn’t the hardest-hitting, but I knew how to take a punch.”  Based on all the legislation that has been passed since 2008 that an  overwhelming majority of the American people have opposed, makes one wonder if Harry Reid took a few punches too many.

Shortly after taking office and settling into his “bash business” mode Obama blasted businesses for their extravagant meetings held in places like Las Vegas.  Someone then whispered in the president’s ear that extravagant business meetings in Las Vegas were good for Las Vegas and Harry Reid. Oops.  And there you have the crux of the problem.

What, exactly, is government’s role to tell private companies how to spend their money?  What is the role of governments to say to a BP, “Give us the $20 billion, or we’ll take it from you,” as was attributed to Joe Biden, without first going to court?  What is the role of government to say to its citizens, you must buy this health care product or pay a fine?  Well in Hugo Chavez’s Venezuela, it is probably all fine and dandy, but in America?

Barack, the standup comic, used the analogy that he and Harry Reid had mud on their shoes, were pushing hard to get the car back on the road, and were making progress little-by-little and when they finally got one wheel on the pavement the Republicans want to throw the car into reverse.  Really?  I would compare it more to conservatives telling everyone to get out of the car and help push, instead of waiting for Nancy Pelosi to come back from Dunkin Donuts with free food for all the overweight union bosses jammed in the car squawking that they didn’t do manual labor.  Their contract didn’t call for pushing cars out of ditches. 

So, while this car should have been out of this ditch and well down the road by now, Harry and Barry will try to convince us that what they’re doing is absolutely brilliant; it’s just that we are too stupid to see it.  After all, it took the greatest president in history, FDR, over eight years and a World War to get us out of the Great Depression, so relax we have another 6 ½ years to go.

Imagine what would have happened if the ever resilient American economy was allowed to work on its own without all the government intervention in the 1930s.  Perhaps the Depression would have been shorter like the recession of 1920-1921, and perhaps we would not have had World War II, and Fannie Mae, and a bankrupt Social Security, and a couple of generations later all of us swimming in debt.  It’s time the tow truck of the most powerful economy on the face of the earth to come along and be allowed to do its job.  Tell Harry and Barry to go sit down on that stump over there, and watch how it is really done.  “You’re making a mess of yourselves and embarrassing the rest us.”

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Congress Gets Aggressive on Oil Spill

by Bill O'Connell on July 8, 2010

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I received an e-mail from my Congressman telling me how he was on top of the situation in the Gulf:

“I am a member  of the Committee on Transportation and Infrastructure, which is at the forefront of an aggressive (sic) Congressional response to BP’s oil spill.  Last week, I voted in Committee to approve a comprehensive legislative response to environmental and economic liability issues raised by the spill.”

As I had written about previously (The Regulators are Dead, Long Live the Regulators), this was just one more case of government failing us but then rushing out more legislation and control so it won’t happen again.  If government was doing its job, it shouldn’t have happened in the first place.  So I wrote back to the Congressman.

 Dear Congressman Bishop,

I read with interest your e-mail to me about the Committee on Transportation and Infrastructure, which you say is at the forefront of an aggressive Congressional response to BP’s oil spill.  Excuse my skepticism but this sounds like one more “we’re really gonna fix it this time,” response to the failure of government to do what they are already empowered to do.

You say the Oil Spill Accountability and Environmental Protection Act of 2010 “will ensure that responsible parties will be responsible for 100% of the oil pollution cleanup costs.”  If I am not mistaken it was the Congress that passed a law limiting the damages from an oil spill to $75 million, which created a moral hazard that perhaps encouraged BP to cut corners.  But wasn’t it BP who voluntarily waived the $75 million limit and has promised from the start that they would pay the full costs, thereby helping Congress remove the egg from their collective faces for including the limit in the first place?  Don’t get me wrong, BP has a lot to answer for but at the same time BP applied to the government regulators for several waivers of safety tests and requirements that the government granted.  If government had been doing their job, perhaps this would never have happened in the first place.

Aside from closing the barn door after the horse has escaped, I see no mention in your e-mail about holding Congressional hearings to ask the Obama Administration why they have not yet suspended the Jones Act and accepted the offer of help from twelve countries in the cleanup effort. When asked, Thad Allen and Carol Browner offered the weak excuse that no one asked them for a waiver.  Why did the administration stand in the way of Louisiana building sand berms to stop the oil from reaching the coast because of environmental reasons?  From an environmental disaster standpoint, doesn’t the oil gushing in the Gulf trump other concerns?  We seem to have multiple agencies operating in the Gulf and each one is getting in the way of each other and no one in the administration is taking the lead to clear the red tape.  Why is that Congressman?

Instead of talking about preventing avoidable disasters in the future, why don’t you find out why this avoidable disaster was not prevented by the regulations we have on the books and by the agencies in charge of doing so?  For once, perhaps you can wait until those facts are known before you rush out to craft more legislation to fix a problem like you did with the financial services industries when it will be months before the Angelides Financial Crisis Inquiry Commission has finished its investigation. 

Government that works is more important than signing ceremonies for ill considered legislation that is rushed and voted upon but unread by our representatives.

Sincerely yours,

William R. O’Connell

 I am sure there will be a signing ceremony and tough talk about how we’re really putting an end to this wild unfettered market, but if you trace it back this disaster had government leading the way.  It forced the oil companies to drill in deeper water; it created a moral hazard by capping their liability for any spills to $75 million (which BP waived and accepted responsibility for the full costs); the regulatory agency in charge both collects royalty payments from the oil companies and assesses penalties for failure to comply with regulations; and that same agency granted BP several waivers to take shortcuts before the well failed.  But don’t worry Congress is really going to get tough now.

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Is Lying the New Status Quo?

by Bill O'Connell on July 8, 2010

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I do not like to throw around a charge of mendacity without good reason particularly after listening to the mainstream media and liberal blogosphere accuse Bush of this all day long.  But the more I listen to what comes out of this administration and the actions they take it is getting harder to hold my fire.

Take for example the brouhaha over the immigration law that hasn’t even gone into effect yet in Arizona.  From the start the administration has falsely portrayed the law as racial profiling, but when asked if they had actually read the ten page law, both Attorney General Holder and Homeland Security Secretary Napolitano said they had not.  How do people in such senior positions in any administration make such a bold claim without reading what they are opposing?  It begs the question, do they know they are talking about?

The federal government has gone forward and is suing Arizona over the law claiming that it preempts federal law.  But here are some interesting questions:

  • If the Arizona law preempts federal law and that is a bad thing, why does the federal government not sue San Francisco and other cities who have openly professed that they are Sanctuary Cities and immigration law will not be enforced therein?
  • A recent news report is that there is a law on the books in Rhode Island that is virtually identical to the law in Arizona and it has withstood judicial challenge?  Why isn’t the federal government suing Rhode Island?
  • The thrust of the federal government’s pique with the Arizona law is their claim that it is discriminatory.  But this same administration has just ordered that a case be dropped against a radical hate group, the Black Panthers, for putting armed thugs outside a polling place in Philadelphia on Election Day in 2008.  According to six career Civil Rights attorneys in the Justice Department, the case was a slam dunk and they had already gotten a default judgment from the court, but this administration chose to snatch defeat from the jaws of victory.  The Justice Department’s claim is that the facts did not fit the law.  Anyone who has seen the video of the incident knows that is a bald faced lie.  Is this administration for discrimination or against it?

The latest move by this administration against the rest of us is the recess appointment of Donald Berwick as the head of Medicare.  The lie in this case, is that the Republicans were stalling the appointment for “political purposes.”  Now other presidents have used recess appointments.  Both Clinton and Bush used them many times, however it was typically when they could not get the Senate to act on their nominee.  In this case, Max Baucus (D – MT), had not even scheduled hearings and eleven weeks after the nomination, the administration had not yet completed the nominating paperwork.  So was this action taken because of inaction on the part of the Senate or was the administration lying because they really didn’t want a public debate on Dr. Berwick?

Dr. Berwick has said he is, “Romantic about the National Health Service,” of Britain.  For all the false claims by the Obama Administration that if you are happy with your current health insurance you will be able to keep it, they stealthily appoint a socialized medicine disciple.  Dr. Berwick has also famously said:

 “The decision is not whether or not we will ration care – the decision is whether we will ration with our eyes open.”

Let’s see, the Obama Administration appoints Dr. Berwick head of Medicare.  Medicare is the health care program for the elderly.  Dr. Berwick is plain about health care rationing and suggests the way to do it is with our eyes open.  While the term “death panel” may have been used by Sarah Palin partially for its shock value to drive home her point, changing the name to a “rationing” panel would make it different in what way?

Here is the key distinction.  In the hands of the individual and their family, they can decide what kind of care they want to provide their loved ones.  They can decide when enough is enough or whether to press on.  In a free market, insurance policies would be true insurance not medical payment plans.  But regardless you would have the liberty to decide.  In this administration’s world, some bureaucrat makes the decision and after they have driven all the alternatives out of business, other than those available to the wealthy, you will have no choice but to succumb to the will of Big Brother.

We are currently surrounded by news of massive government failures in regulation in the areas of finance and the oil industry and we are to believe that they will be superb in running one-sixth of the economy.  Do you believe the lies?

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Desperate Times, Desperate Measures

by Bill O'Connell on July 5, 2010

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The clock is running out on the Democrats.  This week’s dismal jobs report, hailed by this Pollyanna administration as more good news because somebody somewhere hired someone, means the number of job reports before Election Day to is down to three.  So the Democrats are calling for the Hail Mary pass.  Propose extending unemployment benefits and when the Republicans balk unleash a fusillade of class warfare:  cruel, heartless, racist, homophobic, sexist… did I leave anything out?

To extend jobless benefits requires government money.  The government is out of money and is borrowing like mad.  But extending jobless benefits only makes the slightest bit of sense if there are prospects for jobs in the immediate future.  But this government’s policies, despite their delusional happy talk, is the reason we are stuck in a jobless recovery.  This government is intent on adding program after program that someone will have to pay for.  Until the smoke clears and small businesses can tally up the cost, they are not going to hire anyone unless they absolutely have to hire to fulfill whatever book of business they currently have.  But even Democrats who have a prayer of staying in office do not want to spend more money lest that turn into the tipping point to send them packing.

So look for the shrill pitches by Nancy “Unemployment Checks are the Fastest Way to Create Jobs” Pelosi to try to tar fiscally responsible Republicans as heartless.  The way to solve the problem is by allowing the economy to grow and by growing create jobs.  Otherwise we are just kicking the can down the road.  Extend unemployment benefits today while continuing job killing policies, will only mean the same scenario repeating a few months down the road.  People are tired of drawing unemployment checks, they want to draw a salary and that means jobs.  Let’s hope the next three months will be swift and the government house cleaning equally so.  They don’t get it and there is little hope,  given Nancy Pelosi’s bizarre understanding of economics, that they will.  Throw the bums out and let’s get back on the road to recovery.

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Taxes Affect Behavior, Stupid

by Bill O'Connell on July 4, 2010

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An article in today’s New York Times is just one more, “Don’t let a crisis go to waste,” move from this administration.  The article, titled “As Oil Industry Fights a Tax, It Reaps Billions From Subsidies,” uses the same tired talking points to justify another tax increase that will ultimately be passed along to consumers.

The article talks about how the oil companies take advantage of tax credits and breaks and then it also talks about how many oil based companies re-incorporate in countries like Panama, the Marshall Islands, the Cayman Islands, and Switzerland because it will lower their taxes.  When with the Statists get it?  If you raise taxes both corporations and people will change their behavior to lower their taxes.  Impose a millionaire’s tax in Maryland and Maryland discovers they have one-third fewer millionaires a year later and hundreds of thousands of dollars in less revenue.  Impose among the highest tax rates in the developed world on businesses and businesses will move to where the taxes are lower.  Create tax breaks and then somehow the Progressives are surprised that companies took advantage of them.

The initial thrust of the article was that the tax on oil companies was necessary to pay for the cleanup of the oil spill in the Gulf.  Pardon my confusion, but didn’t the government just get BP to pony up $20 billion into an escrow fund for this purpose?  Hasn’t BP said from day one that they will pay the cost for the clean up?  So why are the Progressives in Congress rushing to put a new tax in place other than to take advantage of a crisis to reach into your wallet?

Another unintended consequence of our onerous tax policy is that when companies incorporate in other countries, those countries often have lower engineering and environmental standards.

I am no fan of corporate welfare so why don’t we take the IRS code and run it through a shredder?  Get rid of the tax breaks across the board.  Lower the tax rate to a fixed number that is on par with other developed countries.  According to the Heritage Foundation, the freest economy in the world is Hong Kong, which oddly enough is located in Communist China.  The Chicoms were smart enough to leave well enough alone when Hong Kong reverted to their control from Britain in 1997.  Their individual tax rate is progressive ranging from 2% to 17% or an option for a 15% flat rate depending on which liability is lower.  The top corporate tax rate is 16.5%.  Their five-year compound annual GDP growth rate is 5.7%; unemployment is 3.5%; and their inflation is 4.3%.  By comparison, our top corporate tax rate is 35%, more than double that of Hong Kong; our five year compound annual GDP growth rate is 2.2%; unemployment is 9.4% (at the time of this study); and inflation is 3.8%.

If we could implement real tax reform it would not only simplify our lives, save several hundred billion dollars in compliance costs, reduce uncertainty for business, create jobs, and grow the economy.  With a larger pie, overall tax revenues will also increase. 

In that Heritage study the United States has the eighth freest economy in the world, down one place from the year before; not the direction we should be going.  Imagine if we set a goal to become the freest economy in the world.  Americans like a challenge so let’s set our sights on becoming number one.  The first three to concentrate on passing are those directly in front of us: Canada, Switzerland and Ireland.  On this Fourth of July, let’s plant our flag and get to work.

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Obama Suspends the End of Racism

by Bill O'Connell on July 2, 2010

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His election was a major milestone in the history of the United States.  Leaving aside his political philosophy which a number of us opposed and more are seeing that philosophy more clearly now, electing the first African American to the presidency with 53% of the popular vote no less, truly shows how far our nation has come from the dark days of slavery.

Having achieved this milestone has proved a two edged sword to the progressives and statists.  By celebrating the election of Barack Obama it also signaled the defusing of the most potent weapon in their arsenal, the race card.  How can you routinely call America a racist country when we just elected an African American President of the United States?  By winning with 53% of the popular vote, more than Bill Clinton in two elections and more than Jimmy Carter, it was clear that the black vote alone could not have elected him.  It required him winning over many white voters as well.  How do you continue to justify Affirmative Action when an African American was chosen by his fellow citizens to the most powerful position on earth?  But the progressives and the statists continue to pull the trigger on this dud, particularly where the Tea Party movement is involved, without proof and without shame.

 A New Dark Chapter?

Ironically, it is the Obama administration that is practicing a new kind of racism that the mainstream media is conspiring with them to hide.

During the 2008 election, several members of the Black Panthers dressed in paramilitary uniforms and brandishing a nightstick, stood outside of a polling place in Philadelphia intimidating voters by their physical presence and through verbal taunts.  The Black Panthers were caught on video tape and as this was a clear violation of the Voting Rights act, charges were filed against them.  J. Christian Adams, one of the attorneys at the Department of Justice handling the case called it the “easiest case I’ve ever had.”  The facts were clear, the video tape provided irrefutable evidence and the defendants didn’t show up in court to dispute the charges.  Because they didn’t show up, the judge issued a default judgment, meaning the Justice Department won the case and only the punishment remained.  That is, until the new leadership of the Justice Department weighed in.

 This case was originally filed in the last days of the Bush administration.  So with the victory in hand, the Justice attorneys handling the case were told to dismiss the charges and drop the case.  The reason given was that the “facts and the law don’t support the case.”  It was further ordered that these kinds of cases were “not going to happen out of the Civil Rights Division” of the DOJ.  In other words, where the plaintiff was white and the defendant was black, the Civil Rights Division of the Department would not pursue the case.  If a regional United States Attorney brought a case, the DOJ would permit it to go forward, but not from within the Civil Rights division.

The individuals who delivered this order were Loretta King and Steve Rosenbaum, political appointees.  Adams went further to say that Assistant Attorney General Thomas Perez of lying under oath to a federal commission about the circumstances surrounding the decision to drop the probe.   The Justice Department denied Adams allegation:

 “It is not uncommon for attorneys within the department to have good faith disagreements about the appropriate course of action in a particular case, although it is regrettable when a former department attorney distorts the facts and makes baseless allegations to promote his or her agenda,” she said in a written statement.

Mere partisan politics?  Sour grapes?  You might think that until you hear from Bartle Bull, a lifelong Democrat and Civil Rights attorney who was an eye witness to the incident.  Here is an interview with Mr. Bull and Megyn Kelly of Fox News.  It is nothing less than stunning.  Interview.   He describes how one of the Black Panthers said to him and a person with him, “Now you will see what it’s like to be ruled by the black man, cracker.”

The first African American president has people in his administration who will not enforce the Voting Rights Act if the person whose rights are being violated is white.  I need not point out that if  the Ku Klux Klan was standing in front of the polling place and the Justice Department dropped the case against them what the outrage would be.  But with the mainstream media merely the propaganda arm of the administration, this news is only being carried by Fox News and on the Internet.

President Obama and Attorney General Holder must answer to this outrage.  They have to tell the American people why they refuse to carry out their sworn duty and enforce the law, particularly when the case was already won and they demanded that the charges be dropped and that no new cases would originate from the Civil Rights Division of the Department of Justice.  A great moment in American history will have a stain upon it unless President Obama immediately reverses course.

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Obama Calls His Economic Team Incompetent

by Bill O'Connell on July 1, 2010

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Well the cat’s finally out of the bag and it’s been loosed by none other than President Obama himself.  Once again out on the stump where he is most comfortable and away from the Oval Office where decision making is required, the president is now taking a new tack, or it is an old one?  He is now saying how much worse things could have been if not for his stimulus program.  This is the standard progressive/statist line that we didn’t do enough… if only we spent more money our program would have worked.

But here’s the problem.  To get the $787 billion stimulus package passed the president said that if we did nothing, unemployment would rise to 9%, but if we passed his stimulus package it would go no higher than 8%.  Where is the unemployment rate?  It is at 9.7%.  So if things could have been worse if they did nothing, his economic team is totally clueless because they were the ones who put forth the 8% vs. 9% argument.  Now Obama is trying to tell us that if we did nothing, the unemployment rate could have been in the double digits.  Who says so?  Is this his own projection or is his economic team back at the Ouija board?  Is anyone from the economic team being fired?

Here is an alternate theory.  If the stimulus plan was not implemented and the president cut taxes by $787 billion instead and promised not to introduce any new government programs for two years, that the unemployment rate would be much lower.  How can I make such an outrageous claim?  Let’s look to history.  In 1920-1921 there was a steep recession where the unemployment rate hit 11.7%.  Back then, government didn’t saddle businesses with regulations and businesses were free to cut wages and make other adjustments without government meddling.  Within one year the unemployment rate fell to 6.7% and the following year it was down to 2.4%  Contrast that to the Great Depression where we had massive government intervention and massive government spending and the unemployment rate never fell below 14.7%.

Bringing Jobs Back to America

Another brilliant example of your government killing the economy comes from the company Bucyrus Erie.  They were bidding on a job in India to provide heavy equipment to help them mine coal for a power plant the Indians were building.  Bucyrus Erie went to the Export/Import bank, a government agency, to try to get a loan guarantee to finance the deal.  Because a coal plant would increase the carbon footprint of India, the Ex/Im bank turned down the request.  This didn’t stop the plant being built, it just meant that the heavy equipment was going to be provided by China or Russia instead of the USA.  There would be no effect on the carbon footprint, a big effect on jobs in the US.  At the same time, President Obama is on the stump talking about how hard he is working to bring jobs back to the US.  Really?  They must have read his speech over at the Ex/Im bank, because they are reconsidering Bucyrus Erie’s request.

More government is killing our economy.  Our economy is very tough and it is extremely hard to bring down, but the current administration is trying its best to do so.

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