With the economy in shambles and his campaign sound bites and early interviews as president coming back to haunt him, President Obama has ramped up the class warfare rhetoric. Let’s put the lie to these strategies.

The Payroll Tax Cut

The issue here is that President Obama wants to help the middle class and he claims the Republicans do not. The famous payroll tax cut puts about $8 a week in the pocket of individuals. But everyone who pays the payroll “tax” expects to get every dollar back, and then some, after they retire. So what is really going on here? The government forces you to participate in the Social Security system. It offers a lousy rate of return compared to alternatives and if you die before you start collecting, everything you paid into it is gone. Your heirs get nothing. If Obama believes in cutting back on payroll taxes, why not convert everything to private accounts and eliminate the tax altogether? Let people save for their own retirement. Let them put more away in the good times, and be able to scale back in the bad times.

The Republicans are not opposed to Obama’s plan, their only requirement is that we cut somewhere else in the budget to make up for the shortfall. This is nothing new. Former Kentucky Senator Jim Bunning raised this very point nearly two years ago, when the Democrats held both houses of Congress. In this enormous government can’t we find anything to cut? Find the cuts and the Republicans will sign on. If not, this is just another case of piling debt on our children and grandchildren, because they will have to make up the difference when we retire.

Taxing the Rich

This week we saw former senator and former New Jersey governor, Jon Corzine testify before Congress to say how sorry he was that he couldn’t find over a billion dollars of his customer’s money. But since he resigned from MF Global he doesn’t have access to any of the records to help in the search. Is the Justice Department beginning a criminal investigation?

Has anyone been charged with a crime for what happened in the fiscal meltdown of 2008? Has anyone collected more campaign cash from Wall Street than Obama? So is it unusual to conclude that President Obama, other than giving speeches, is perfectly fine with Wall Street ripping off the American people, as long as he can rip off the most successful people in America and claim he is looking out for the little guy. Let his pals get boatloads of government money to bail out their companies so they can keep getting richer and then say he wants to tax them more. Is it any surprise that a lot of rich Democrat supporters are coming out and saying they are all for paying more. Who wouldn’t?

President Obama says you can have billions of tax dollars and I just want a kickback in the form of higher taxes so that I can keep spending recklessly. However, ask anyone of these guys to write a check to the Treasury voluntarily, and they all balk. Why? Nobody gets any credit for donating their money to the government. They want the government to take it, not just from them but from every successful business person.

An Economic Winter

If President Obama gets another term, we may face an economic winter from which we may never recover. If the last three years were painful, the next four could be even worse.

That’s my opinion; I’d like to know yours. Please comment below.

Drawing by DonkeyHotey

Rather than do their job, Congress and the President designated a super committee to do it for them. The committee failed miserably.  But what exactly were they shooting for?

Since we are talking about Washington, you have to listen carefully lest you believe they are actually trying to accomplish something significant. Since President Obama took office, annual deficits north of $1 trillion are commonplace. The committing was working on cutting $1.2 trillion, so that would fix the problem, right? Wrong. That $1.2 trillion they they were unable to come up with was over ten years, not next year. But it’s okay, they have a fall back plan. If this committee of $174,000 per year public servants and their staffs couldn’t reach an agreement then automatic cuts will come into play, half against defense spending, half against non-defense spending.

The stalemate was along familiar lines. The Democrats wanted massive increases in taxes, the Republicans were opposed to any tax rate increases. That last point is important because Republicans put on the table more revenues through closing loopholes, but it was not enough for the Democrats.

Citizens to the Rescue

I was in Washington last June with a group of Tea Party leaders who gathered to discuss our future plans. At that gathering the idea of a citizen’s debt commission was hatched. Why not have everyday citizens put together their thoughts on spending cuts and see what they could come up with? Nominate a core number of individuals, and then hold a series of town hall meetings around the country to discuss what Washington should stop doing to help balance the budget. In addition, set up a web site where citizens could vote on some of the proposals and decides between alternatives. For example, the alternative of repealing ObamaCare compared to any other spending cut in a one-on-one comparison (e.g., repeal ObamaCare or cut the Department of Education) ObamaCare lost 93% of the time. Similar comparisons were made and citizens voted on them.

The result was a report from the Tea Party Debt Commission. No increase in taxes and savings of nearly $10 trillion. That is not a target to be reached through future haggling. Those are identified spending cuts. This committee of volunteers (not $174,000 per year politicians) did what the super committee could not. They came up with the goods, the super committee folded like a cheap lawn chair. Here is the Tea Party Debt Commission report (Click here).

A Funny Thing Happened on the Way to Washington

With the report completed, Senator Mike Lee arranged to host a meeting where the Tea Party Debt Commission could present their findings in the Capital building. I talked about the ideology of taxes versus no taxes, here is where the arrogance comes in. As Senator Lee is about to convene his meeting, he finds that the microphones that were going to be used were confiscated. Why? New York Senator Chuck Schumer, Chairman of the Senate Rules Committee said that holding mock hearings was against Senate rules. Here is Senator Mike Lee, trying to understand why the First Amendment isn’t allowed in our nation’s capital.

http://www.youtube.com/watch?v=lKCnz_RgIOE

So, our august legislators couldn’t come up with a measly $1.2 trillion, which by the way doesn’t cut spending, it merely slows it down some, and a bunch of citizen volunteers came up with a plan, in the same timeframe, ten times as large that actually does cut spending, actually does balance the budget, and actually does start reducing our nation’s debt. Yet, our elected representatives, our employees, didn’t even want to hear what that citizen’s committee found and wanted to do whatever they could to prevent others from hearing it.

Turn them out. In 2012, if they don’t want to hear what we have to say, how can they possibly be representing us? Senator Schumer is one of those individuals who thinks he is smarter than everyone else (after all he scored 1600 on his SATs), and who has spent his entire adult life in government. Although Senator Schumer is probably a very wealthy man by now, it’s time for him and those like him to experience the private sector first hand.

That’s my opinion; I’d like to know yours. Please comment below.

photo by cliff1066

Just because Democrats are statically stuck on stupid, why do they think everyone else is? What I am referring to is static analysis of changes to the tax code. Democrats always want to have any potential changes statically scored. In other words if Democrats raise rates 10%, naturally, the government will get 10% more revenue. If on the other hand you cut tax rates 10%, a very bad thing, tax revenues will fall 10%. The problem is that they have been proved wrong every time. In other words, Democrats believe that if they raise tax rates you will be too stupid to change your behavior in response.

The evidence is in that when capital gains tax rates were cut, revenues poured into the Treasury. When the Bush tax cuts went into effect in 2003, by 2007 the Treasury took in more revenue than at any time in history.

Federal Government Revenue over Time

So why, do we have massive deficits. There are two reasons and neither of them have to do with the Bush tax cuts. The first is the housing bubble bursting. This put us into a recession and when economic activity slows, tax revenues fall as well. As the economy recovers, tax revenues will increase. This bedrock principle is what the Democrats deny exists. The second reason is spending. We are spending an enormous amount of money. If you want to see the deficits shrink, stop spending, and stop attacking businesses.

The Latest Dustup

The much ballyhooed debt committee that is supposed to come up with their recommendations by Thanksgiving has reached another impasse. The Republicans put $500 in additional revenues by locking in lower tax rates, and closing $250 billion worth of loopholes. The resulting growth in the economy would add another $200 billion and another $40 billion would come by adjusting the tax brackets for inflation. I thought the Democrats were agreeing with Herman Cain when they said, “Nein, nein, nein!” until I realized they were speaking German. To the Democrats lowering the tax rates has no effect on the economy, so the $250 billion in loophole closures will only generate $250 billion.

So as the clock ticks down, you can expect the committee to remain stuck on stupid, and our military to take a big hit as mandatory, pre-negotiated cuts kick in. Isn’t it gratifying to pay a bunch of people $174,000 a piece to have them accomplish absolutely nothing? Isn’t that how it is where you work?

That’s my opinion; I’d like to know yours. Please comment below.

Photo by roberthufstutter

One of the knocks on Herman Cain is that he has never held political office and therefore he doesn’t have the necessary experience. I, for one, would like to see a lot more people who have met a payroll go into government, than be governed by those who have never done anything other than live off of a government paycheck. They have no concept of the real world, but love to write the rules the real world must live by.

We have been watching a number of debates among the Republican candidates and one thought that must be in the back of the minds of some, is how will this particular candidate perform in a debate against the charming Barack Obama? Will Barack Obama be able to talk himself back into the White House using his “gift“?

In the purely political realm there have been few who were as talented as Bill Clinton. Bill Clinton survived in 1996 because his primary goal in his life, in my humble opinion, was to be president. Ideology came second. So if remaining president meant pivoting, he pivoted. If remaining president meant working with Newt Gingrich to reform welfare, pass NAFTA, balance the budget, that was what he would do and then apply his political skills to make sure he got all the credit.

In 1994, when Bill and Hillary were trying to push their version of health care, there was a Town Hall meeting where one of the questioners was a fellow by the name of Herman Cain. Watch this exchange and then tell me how worried you would be if Herman Cain faced off in a debate one-on-one for the full two hours, with Barack Obama.

http://www.youtube.com/watch?v=-WP5dYfBBzU

I think Herman Cain is very electable. He is the only candidate with a plan to fix Social Security. He has a concrete plan on taxes. You may not agree with him, but he has done his homework, and as you can see in  the video clip, when Herman does his homework, he knows what he is talking about and he doesn’t need a teleprompter to tell him what he is talking about.

That’s my opinion; I’d like to know yours. Please comment below.

President Obama Speaking at Solyndra

Congressman Tim Bishop has not been able to keep from spending, no matter what. The Postal Service has an $8.5 billion deficit, and Tim Bishop is out there fighting to keep an unneeded post office open. We are trillions of dollars in debt and he comes out blasting the Tea Party, because they want Congress to not waste anymore money on green boondoggles like Solyndra.

At issue is a Continuing Resolution, that is, a bill to provide temporary funding to the government. At the heart of the issue is that the Federal Emergency Management Administration (FEMA) has run out of money, so there is an issue of whether to give them $3 billion more or $6 billion more. In addition the Republicans want to cut funding for such green projects like Solyndra, which just declared bankruptcy after getting a $500 million taxpayer-funded loan guarantee. How heartless can those Tea Party people be to not want to send good money after bad for progressive boondoggles? But of course we should listen to Tim Bishop. After all he has been such a trusted steward of our money so far, right?

The above chart shows how much debt limit has been increased by Congress to keep the government functioning, since 1940, when it was almost zero. Tim Bishop was sworn into Congress in January of 2003, from a point where it had leveled off, the line almost goes vertical. That is eight trillion dollars in additional borrowing in just ten years in office, and he has the utter gall to say the Tea Party’s calls for restraint are unwarranted? Somebody has to do it. If Tim Bishop and Nancy Pelosi had not spent trillions of dollars that the government didn’t have, maybe we wouldn’t be quibbling over $3 billion.

Waste and Fraud

It remains to be seen if Solyndra was a massive fraud or the Democrats thinking they are really investment bankers and venture capitalists rather than elected officials, but we could have used that $500 million rather than waste it. But Bishop objects:

“Even worse, the Republican bill calls for much of that sum to be funded by cutting federal loan programs that have encouraged new job creation by U.S. automakers and clean energy manufacturers.” — e-mail message from Tim Bishop to his constituents.

$39 billion in stimulus dollars have been earmarked for green energy jobs. So far, $19 billion has been spent and 3,500 jobs have been created. That’s $5.4 million per job, people, do you think we can do better than that in the private sector? But what is a “green job?” According to Labor Secretary Hilda Solis, if you drive a hybrid bus, it’s a green job, if you drive a gas-powered bus it is not a green job.

http://www.youtube.com/watch?v=1scrqqWpFlM

As one pundit put it, Washington is the only place where the circus never leaves town. This is what Congressman Bishop decries that Republicans are trying to cut. Do you think your hard-earned money is being well spent?

There is a report out today that the federal government paid about $600 million to federal workers who are DEAD! The Justice Department buys muffins for a meeting that cost $16 each! Medicare and Medicaid routinely have $60-$100 billion per stolen, and Tim Bishop has no suggestions how to cut, and even takes the time to write his constituents that, “I am sick and tired of this divisive posturing we have come to expect from the Republican Tea Party Caucus.”

I have a piece of news for you, Congressman, in case you have not been paying attention. The last Democrat who thought it would be a great idea to attack his opponent as beholden to the Tea Party was a guy named David Weprin in the 9th Congressional District of New York special election. In a district that was 3:1 Democrat registered voters, he lost big. Many Tea Party members from the heart of your district traveled on their own time and at their own expense into Brooklyn and Queens to get out the vote for Bob Turner. If you think it is a winning strategy to attack the Tea Party, I have three words for you. Bring it on.

That’s my opinion; I’d like to know yours. Please comment below.

Photo by Mike Licht, nationscapital.com

Often overlooked in the class warfare that President Obama is unleashing on America so that he can continue spending, is how business is being strangled by regulations. Every time the government fails to protect our rights and freedoms because it is too busy trying to micromanage our lives, and as a result some calamity descends upon us, the answer is always more regulations. Nowadays, that will typically mean thousands of pages of new laws that turn into tens of thousands of pages of new regulations and those who never met a payroll wonder why we are stuck at 9% unemployment.

Why does this happen? I believe there are two reasons. The first is the expansive view of the Constitution that many progressives hold. There is very little that they believe the federal government is not allowed to do. Most of our law schools are also espousing the concept of a “living, breathing” Constitution, meaning that what the Founding Fathers wrote is quaint but its meaning must change with the times. The graduates of those law schools eventually make it to the bench and even the Supreme Court. The problem is that if you take that view, the Constitution is meaningless.  If you can say the Constitution meant this in 1792, but those same words mean something else today, you no longer have a Constitution.  As Jefferson wrote,

“Our peculiar security is in possession of a written Constitution; Let us not make it blank paper by construction. –Thomas Jefferson, Letter to Wilson Cary Nicholas, Monticello, September 7, 1803.

The progressives are doing exactly what Jefferson said we should not do, turn the Constitution into blank paper, by contriving different meanings from the words than the authors intended.

The second problem is that the function of the Congress is to write laws. They don’t enforce them, that’s the role of the executive branch. So their knee jerk reaction to a problem is to write another law, regardless of whether the previous law is not working simply because it is not enforced.

So what are the checks on this runaway regulation? Congress keeps churning out more and more regulations that are choking the economy, and the Supreme Court has let them wander far afield of the Constitution. There used to be another check on runaway federal power, but that was eliminated with the Seventeenth Amendment to the Constitution.

When the Founders created the concept of the United States, they envisioned a president elected by the people, a judiciary appointed for life, and a Congress split into two chambers. One of those chambers, the House of Representatives would be the branch of government closest to the people. The other chamber was to represent the states. If you recall it was the states that created the federal government, not the other way around, and the states wanted to have a say in that government. To do so, senators were appointed by state legislatures, and as such, if they wanted to remain in that role they were to represent the interests of the states to the federal government.

The Seventeenth Amendment changed it so that senators would be directly elected by the people. Knowing human nature as I am sure you do, would senators continue to care what their state legislatures wanted or would they start to pander to individual blocks of voters? So with the passage of the Seventeenth Amendment the states were shut out of a direct say in the federal government and were reduced to becoming lobbyists.

If you think of some of the more partisan senators, from both sides of the aisle, do you think they would be appointed by their state legislatures? Do you think there would be any such thing as a federal unfunded mandates? Do you think there would be a Department of Education?, Transportation? Housing and Urban Development? EPA? Most states already have similar departments at the state level. What senators, appointed by their state governments, would pass these laws? Very few, I would venture to say.

Regulations in Action

Consider where we are today. Early in the Bush administration, concern was raised about Fannie Mae and Freddie Mac and their solvency. Christopher Dodd and Barney Frank said they were fine, and Dodd filibustered any attempt to rein them in. The financial industry blew up and what do we now have? The Dodd-Frank Act that layers on massive regulation to the financial services industry and many banks are just sitting on money rather than lend it.

In 2001, Enron went bankrupt taking billions down the drain with it. The principals of that firm ended up with long prison sentences. The accounting firm that audited the books went out of business, but somehow that was not enough. Massive new regulations were needed to make sure it didn’t happen again. In the following video, listen to Bernie Marcus, one of the founders of The Home Depot, which employs 350,000 people today describe what it would be like to start that company today.

http://www.youtube.com/watch?v=MjRIM1LFWRM

In an economy that is in desperate need to create jobs, a company that eventually created 350,000 jobs could not get off the ground today because of regulations. How many more Home Depots are out there? How many companies have said, the hell with it, let’s stay private, even if it means curtailing growth, going public is not worth the cost nor the headaches.

Our government is killing us, economically. It cannot slake its thirst for more tax revenues; it cannot stop spending;  it cannot resist telling us something else we should do for our own good; it cannot help trying to craft the perfect law and regulation that will prevent all harm from befalling even the most naive among us. It cannot be done. But unless and until we unwind the coil of regulation that is choking us to death; unless and until we perform liposuction on the laws that are crushing us under their weight; unless and until we return to Constitutionally limited government and fiscal responsibility and personal responsibility, the terms Life, Liberty, and the Pursuit of Happiness will be redefined to Subsistence, Subservience, and Preying upon each other. Which America do you want to live in?

That’s my opinion; I’d like to know yours. Please comment below.

Progressives are a funny group when it comes to investing, and I mean real investing, not the phony code word for spending. If they’re the ones controlling the money and especially if the money is not theirs, then investing is fine. If it will compete with one of their sacred social programs and you will directly benefit from it, then bar the door it’s an out of control casino.

The Big Ponzi Scheme

Yes, I said it. Social Security is a Ponzi scheme. I wrote about it that way in my book Liberty’s Lifeline, and I was happy to welcome some straight talking from Rick Perry on the same subject. If not run by the government, anyone who ran something like Social Security privately would be in jail, just like Bernie Madoff. The difference between Charles Ponzi or Bernie Madoff and Social Security, is that Ponzi and Madoff had to get people to volunteer their money to the scheme. With Social Security, the government just takes it.

That being said, let’s all agree that we can’t just abandon it. Those who are receiving benefits today and those who are within ten years of receiving benefits, must be protected. We allowed this scam to continue this long and our seniors planned their retirements around it. We cannot allow the rug to be pulled out from under them. But what about the next generation and those after them?

The best plan for going forward is private retirement accounts. The money put into the accounts by the next generations would be their money. They could leave it to their heirs if they don’t live long enough to collect it. If they invest wisely, they could probably live off the income alone and pass the principle to their children which would make saving for their retirement easier. This would have a compounding effect and work toward solving the retirement income problem completely, and privately.

“Invest, did you say,” the progressive asks, “in what? Not the stock market, of course!” Despite the growth through investing in stocks over the long-term is proven as one of the best investments, the progressives will scream, “What about 1929!!! What about 1987!!! Did you forget the dot.com bubble!!! Are you insane!!! It’s a casino, a crap shoot, legalized gambling.” What they are really saying is how will we control the senior vote if they are not fully dependent upon us? If private accounts take hold, the account holders will look for government policies that allow private companies to thrive, which is exactly what progressive policies don’t do.

So progressives don’t believe in investing in stocks, right? Not so fast.

Investing you Can Believe In

If progressives can take your tax dollars, and invest in companies funded by big campaign donors, that push forward their progressive agenda, they think investing is swell. If the investment turns out to be terribly bad, don’t expect to hear many “I told you so’s” from the left. You won’t hear about gambling, casinos, stock market crashes. No, it is about leadership.

That’s what they are saying about squandering $500 million taxpayer dollars on a bad investment called Solyndra, a maker of solar panels that filed for bankruptcy just one year after getting that pile of taxpayer cash. Evidence is leaking out that the green jobs agenda came before stewardship of our tax dollars. There appears to have been White House pressure to push this through before a politically staged photo opportunity for this administration. Oh, they are furiously backpedaling now, working on a timeline to blame it on Bush, naturally, but the stubborn fact that keeps getting in the way is that the Bush administration put a hold on it saying there wasn’t enough information to approve it. Then Obama happened, and it was all systems go.

I noticed that GM stock is trading at around $22.60 per share today. It has to climb to around $53 per share for us to break even on that investment that we positively, absolutely had to make. How’s that Chevy Volt doing? You know, the one that we subsidize to the tune of $7,500 per copy, because you can buy two Toyota hybrids for the cost of one Chevy Volt. Meanwhile, Ford, which turned down a bailout is doing well.

Our government takes our money for the Social Security trust fund and immediately spends it, but progressives tell us how foolhardy it would be to save for our own retirement. If you pay into Social Security all your life but die before you can collect any money, oh, so sorry.  But take more of your money and invest it to protect their union supporters, and campaign bundlers  and that’s okay.

Solyndra’s chief investor, George Kaiser, was also a bundler for Obama’s 2008 campaign, gathering over $50,000 in campaign contributions. Kaiser, together with Solyndra executives and board members, donated $87,050 to Obama’s campaign.

Is your blood boiling yet? There comes a point where you have to ask when does the mere incompetence end and criminal activity begin? While President Obama is jetting around the country trying to sell us on another jobs plan that is all about public sector employees, perhaps we should be looking to do something else.

How about we say goodbye to TurboTax Tim Geithner? He has failed miserably at his job. He should be fired. Next we should start a criminal investigation into the Energy Department people who pushed through this loan to Solyndra and then start a similar investigation over at the Justice Department regarding running guns to Mexico under the Fast and Furious program.

So if you want to invest your own money in some blue chip stocks to reduce your dependency on government programs and build a nest egg that you control and own, that is dangerously reckless. If you want to invest millions in a start-up company making heavily subsidized products, that is on the brink of bankruptcy, to pay back your fundraisers, that’s A-OK. It is time to start getting serious with what is going on in Washington and really clean house.

That’s my opinion; I’d like to know yours; Please comment below.

Photo by Pargon

We need a vibrant and growing economy, but we are being led by someone who believes in all things that make America mediocre.

We’ve seen it all, “don’t keep score of the game or someone will be sad if they lose”; Pass/fail grading systems; schools banning dodge-ball, kickball, monkey bars and tag because someone might get hurt. Does anyone get excited watching such a contest, or would you rather watch the Packers? We seem to be stuck in a union mindset of propping up the incompetent workers and holding back the good ones.

The Union Mindset

In a union all workers are supposed to act like a uniform group. I can’t tell you the number of people I met in business who quit being in a union because of a common theme. “Hey, slow down, you’re making everyone else look bad!’ I knew one guy working construction at JFK Airport in New York. He wanted to keep busy doing his work because it made the day go by quickly. The shop steward told him to slow down, but he just didn’t get it. So, one day, the shop steward took the time to explain it to him. He called him down off the scaffold and took him outside to walk around the hanger. Around and around they slowly walked as the union guy explained the facts of union life to him. He finally understood. He quit and started his own business.

Progressives have the union mindset. Don’t let competition break out it’s bad. So let’s roll everything up to Washington to run the country. We can’t have Texas going competitive on us and tempting people to move there from Michigan, now can we? Whose going to pay for all the social programs back in Michigan if all the productive workers leave. So let’s add ObamaCare and we’ll latch onto those productive workers no matter where they move.

There are roads and bridges that need repair. Don’t trust the states to handle that, what if they don’t have enough money after paying for all their public sector retirees who retired at 42 years of age? What we need is a national infrastructure bank. That’s it, and we can model it after Fannie Mae and Freddie Mac, so that every state can get their roads and bridges repaired and everyone across the country will pay for it.

While we’re at it, let’s have another round of stimulus (what’s that, Nancy? You’ve banned the word stimulus? Okay, okay), er, another round of investment for shovel ready construction jobs. And while it’s true the jobs created by this new round will only last as long as the money does, just like the last time, so we’ll have to do it again. But by that time Obama hopes to be reelected so he won’t care any more.

Never mind the free market working this all out by itself, we need the really, really smart people who only seem to turn up in Washington to generate more great ideas, like “Cash for Clunkers,” “Making Home Affordable,” “Green jobs,” and stimulus dollars for union teachers.

So is it any surprise that Jimmy Hoffa blames the Tea Party and tries to rally the mob to get those “sons of bitches”? What else do they have but the mob? Fire up the crowd with simple slogans, “Racists”, “Terrorists”, “Homophobes”, “Hitler”, while the Tea Partiers quote the Declaration of Independence, the Constitution and the Federalist Papers.

The Way Out of this Mess

There is a way out of this mess and it will take bold action. By bold action I don’t mean to make the same mistakes as what this administration has already done but three times bigger. I mean applying tough medicine like Reagan did to break the back of skyrocketing interest rates he inherited from Jimmy Carter. At the ten month mark of Reagan’s presidency the economy was growing at 9.3% compared to 1% under Obama.

In fact, the economy grew during Obama’s first full year in office, peaked, and started declining steadily. How do you hang that one on Bush?

What is meant by a bold plan is along the lines of the plan put forth by Rand Paul, that would cut spending by $500 billion in the first year. Make no mistake about it, federal worker unemployment will increase, but the government in Washington will get smaller. Some departments that are not authorized by the Constitution would be eliminated; not capped, not trimmed, but gone. The states or local government can decide if they want to continue these programs on the state or local level. States can compete for businesses and citizens rather than just chant, “tax the rich,” and grow government. If a state doesn’t get its house in order, it’s citizens will flee and there will be no bailouts. It is time for responsible and accountable government.

It’s simple, really. Every government program, every regulation has a cost. Government has no money other than what it gets from taxing the people, either directly through income and sales taxes, or indirectly through corporate taxes. Each one taps the brakes on the economy, slowing it down. More and more programs, regulations, taxes, taps and taps and taps on the brakes. As any driver knows, if you tap the brakes enough times eventually you will slow to a crawl. If we want to put America to work again, we need to bust up some of the Washington establishment and use it to fuel the fire of the free market. Do that and stand back, and America will be just fine.

That’s my opinion; I’d like to know yours. Please comment below.

Photo by aranami

An intervention is an orchestrated attempt by one, or often many, people (usually family and friends) to get someone to seek professional help with a serious problem. The term intervention is most often used when the traumatic event involves addiction to drugs or other items, such as spending. Intervention can also refer to the act of using a technique within a therapy session.

If you care about Tim Bishop, if you care about your fellow man, he needs our help. From people who know Tim Bishop they tell me he is a good man, a decent man. But he has a problem. He cannot seem to control his urge to spend, particularly other people’s money.

For those who don’t know him, Tim Bishop is a member of Congress representing the First District in New York. With Washington spending over a trillion dollars a year more than it takes in through tax revenues, everyone needs to pitch in to solve the problem, but the only thing that Tim Bishop has offered as a solution is a single tax break to five oil companies that may, or may not, bring in an additional $3 billion per year, which is about 500 times less than what we need to close the budget gap. More importantly, even this meager offering is not a spending cut, but a cry for more money to spend. We have to get tough with Tim. We need to gather around him, tell that we care for him as our fellow man, but if he doesn’t stop spending cold turkey, we will leave him.

The latest example concerns the US Postal Service. The US Postal Service lost $8.5 billion in 2010. As a cost cutting measure they are looking at closing underutilized post offices. In the 21st century we have tremendous growth in electronic communications, e-mail, online file sharing, cloud computing, even the venerable fax machine is going strong, resulting in a corresponding decrease in “snail mail.” So I wondered, two years ago, why my own local post office was putting an addition on the building? In Setauket, New York, the Postal Service announced that it was closing the post office branch there, one of 3,700 such post offices considered for closure. Tim Bishop to the rescue! We shouldn’t shut down an under utilized post office, after all, look at how pretty the building is! Here is what elected officials at a rally for the post office said.

The legislators said Congress should relieve the Postal Service of a requirement, mandated by the Postal Accountability and Enhancement Act of 2006, to prefund retirees health care costs. The Postal Service pays more than $5 billion a year into a retirement fund for current and future retirees, according to the Congressional Research Service. Bishop told the crowd of about 80 people gathered on the grass and sidewalk in front of the post office to push Congress for action on a bill that would relieve the Postal Service of its prefunding obligation. “Right now the bill’s not moving at all,” Bishop said. After the rally, Bishop said the bill “would provide financial relief to the postal service.” Englebright said after the rally, “The [Postal Service] is overfunding the pension system … it’s an artificial crisis.”

Boy, do those Democrats love calling things artificial crises. When President Obama wanted to slap another $2-3 trillion on top of the national debt and Republicans finally stood up (with Tea Party prodding) and said STOP, it was an artificial crisis. Just tell that to the IRS when they ask you to pay for it. Just send your tax payment in with artificial Monopoly money. Now closing some post offices to stem the hemorrhaging at the Postal Service is another artificial crisis. So Tim Bishop’s solution is to stop setting aside money for postal workers’ retirement. What a great idea! We can fix the problem when Tim’s no longer in Congress. Let’s make that date January 1, 2013.

That’s my opinion; I’d like to know yours. Please comment below.

Photo by Dave Makes

Two news items yesterday, when put together, start to tell an interesting story. Warren Buffett invested $5 billion in Bank of America in a private sweetheart deal that will guarantee him a 6% return (that’s $300 million per year) and he is hosting a fund raiser for Barack Obama in New York where the tickets start at $10,000. What’s going on?

Barack Obama is the worst jobs president since Herbert Hoover (see previous post on this); the economy is flat lining; and yet Buffet thinks Obama is doing a great job. Think of some of Obama’s other supporters among the captains of industry: Jeffrey Immelt of GE and Howard Schultz of Starbucks.

Crony Capitalism

What is crony capitalism? Crony capitalism is where we have a capitalist economy but instead of truly free markets, some business leaders get cozy with government to tilt the playing field in their favor. Those on the left like to paint conservatives as the champions of big business and the wealthy, but if you look at the campaign contributions of many big business CEOs you will be surprised at who they support. Let’s look at two examples, Warren Buffett and Jeffrey Immelt.

Warren Buffet

In the financial meltdown triggered by the housing bubble bursting, the government stepped in to prevent large financial institutions from failing. This creates what is known as a moral hazard. A moral hazard is where the risks associated with a particular transaction are covered by someone else such as the government or insurance, so the investor is willing to take overly large gambles. Why? Generally, the bigger the risk, the bigger the payoff if you are right and if the downside is protected by government or other parties you have less to lose. Big upside, small downside, let’s play!

Warren Buffett invested in Goldman Sachs in the midst of the financial crisis in 2008, as a result of his $5 billion investment he reaped “$10 billion in interest, fees, and dividends,” according to Mark DeCambre at the New York Post. If you know that the government won’t let the bank fail, what is your downside risk? The upside turned out pretty sweet. Warren Buffett was an adviser to candidate Barack Obama and you can be sure the topic of how to handle the fiscal crisis was discussed. Buffett is now investing in Bank of America where his company, Berkshire Hathaway stands to make another killing. Would the government stand by and let Bank of America go under? What do you think?

Warren Buffett has also been making the rounds calling for more taxes on the rich. This writer and others have suggested that if Warren Buffett thinks the government deserves more of his money, go ahead and write the check, but he balks at that suggestion. Why? Depending on when you measure it, Warren Buffett is one of the three richest people in America. No matter how high to raise the tax rates, he will be able to afford it. Other entrepreneurs and small businesses may not be able to afford the higher taxes and thus find their companies financially squeezed. Buffett’s company Berkshire Hathaway has made a lot of money buying up good companies. Could his high tax advocacy be a way for the government to create some new investment opportunities for him?

Buffett has also invested in a Chinese company to build electric cars. Why didn’t he invest in GM to help sell the Chevy Volt? In the midst of this lousy economy President Obama announces new CAFE standards that would require car companies to build cars that would get over 52 miles per gallon by 2025. That will probably drive GM and Chrysler out of business with their heavily unionized companies already at a severe cost disadvantage of around $2,000 per car. What a great opportunity this would create for a company with an electric car! Slap a GM or Chrysler nameplate on it and voila, problem solved.

Jeffrey Immelt

For all the talk about higher taxes, General Electric paid no taxes in 2010. During the fiscal crisis GE got large sums of money from the government.

During the wild Congressional spending spree of the last couple of years, GE miraculously became the largest beneficiary of the government’s Troubled Asset Recovery Program (TARP) bank bailout. Although GE did not initially qualify for TARP, the company’s $18 million annual investment in battalions of Washington DC lobbyists convinced Administration regulators to push that “reset” button and extend TARP guarantees and subsidies to GE. Public records demonstrate GE Capital, the company’s massive financing arm, pocketed $120 Billion in loans from the Federal Deposit Insurance Corporation at interest rates of less than 1% and snatched 25% of the entire $340 billion in subsidies from “Temporary Liquidity Guarantee Program” (TLGP) rescue fund. — Chriss W. Street

Immelt has also been appointed as the head of President Obama’s job council. At the same time Immelt is entering into an agreement with China to build airplanes to compete against Boeing. Meanwhile do you recall Boeing and the government being in the news lately? Well the National Labor Relations Board has told Boeing that it cannot open another factory that will hire 5,000 employes in South Carolina. In the midst of 9% unemployment, Obama said that the NLRB was an independent agency and his hands were tied. How convenient?

What’s that Smell?

While the engines of job creation, small businesses, are stuck wondering what will hit them next, the crony capitalists are cozying up to President Obama and getting fat while stymieing their competition. I don’t know if this is illegal or not, but how much different from insider trading, at least from appearances, is this? The heads of major corporations give advice to President Obama, go out and make spectacular deals, and the economy continues to languish while they get rich. They get rich not because they have a better idea, or are more nimble, but because taxpayers are absorbing much of the risks while they make the dough. Perhaps Congressman Issa can use his Government Oversight committee to ask a few key questions.

That’s my opinion; I’d like to know yours. Please comment below.