Congressman Tim Bishop held an online town hall meeting to hear questions from constituents and give his answers. Perhaps he thought this a safer forum than a live town hall meeting. Last year’s meeting in Setauket did not go well and was soon viral on You Tube.

I will comment on three of the topics from that meeting: the payroll tax cut, regulations, and manufacturing jobs.

Payroll Tax Cut

Congressman Bishop came out heavily pitching the extension of the payroll tax cut, from the normal level of 6.2% to the current level of 4.2% and even to go lower to 3.1%, for at least another year. He made the startling claim, quoting some experts that if the payroll tax cut wasn’t retained it would cost 400,000 jobs. It must be from the loss of all that spending power generated from a 2% cut in the payroll tax. I am sure pizza parlors will be devastated, as the weekly savings to a typical family will be about the cost of a pizza pie. The other statistic was that if the payroll tax was cut further to 3.1%, 750,000 new jobs would be created. Interesting. Raise the tax by 2% and 400,000 jobs would be lost, cut it by an additional 1.1% and nearly twice as many jobs would be created. Like prior predictions of how government intervention would affect jobs, we are supposed to believe that employers will start hiring if the cost of hiring a new employee  is reduced by 3.1% for just one year, before going back up. Only those people who never worked in private industry, like Bishop, Schumer, Obama, would believe that.

Bishop insisted that these cuts would have no impact to the Social Security Trust Fund. Considering that there is nothing in the Social Security Trust Fund other than a bunch of IOUs from Uncle Sam’s other pocket, he may be correct on that front, but he said that the cut would be paid for cutting spending elsewhere. Not surprisingly, he didn’t say where exactly “elsewhere” was.

Throughout the call, Bishop’s press secretary was conducting a dopey poll. To paraphrase, “If you are in favor of the payroll tax cut that will put $1,500 in your pocket, press 1, if not, press 2.” Who wouldn’t press 1? What would the results be if he asked, “If you are in favor of borrowing $600 from China that your children and grandchildren will have to pay back, so that we can give you $1,500 today, press 1, if you think more borrowing and debt is a bad idea, press 2,” I think the poll would turn out quite differently.

Regulations

A caller who owned a small construction company asked about all the regulations and paperwork that businesses had to deal with. Bishop said that President Obama had things well under control forming a commission to “zero base” all regulations and hundreds and hundreds of regulations have been taken off the books. In the Wall Street Journal today there is an editorial titled, “Regulation for Dummies,” that paints a very different picture.

To answer the most basic question—has regulation increased?—we’ll focus on what the government defines as “economically significant” regulations. Those are rules that impose more than $100 million in annual costs on the economy, though there are hundreds if not thousands of new rules every year that fall well short of that.

According to an analysis of the Federal Register by George Mason University’s Mercatus Center, the Cabinet departments and agencies finalized 84 such regulations annually on average in President Obama’s first two years. The annual average under President Bush was 62 and under President Clinton 56

As the graph clearly shows the number of “economically significant” regulations under Obama has skyrocketed. This is what is causing the uncertainty that is hindering employment. How can this be curtailed? A bill just passed in the House of Representatives called the “Regulation from the Executive In Need of Scrutiny Act (REINS)”. This would require any of these economically significant regulations to be sent to Congress for approval before becoming being enacted. What the process is today is that Congress can vote against regulations, but that can be vetoed by the President. If the regulations are coming from the president, wouldn’t you expect him to veto it? This turns it around so that the Congress has to approve the regulations, if they don’t, there is nothing for the president to veto. The Democrats say this is a Congressional encroachment of the Executive.

“The REINS Act would undermine our ability to protect children from harmful toys, prevent asthma and lung ailments resulting from pollution, and ensure that our small businesses can compete fairly in the marketplace,” House Minority Whip Steny Hoyer added. “At the same time, it would force Congress to play a larger role in the regulatory process, leading to even more gridlock in Washington.”

Surely he forgot to mention killing bunnies in there somewhere. But let’s look at the process: Congress passes a law; departments in the Executive branch write regulations to carry out the law Congress passed. So why is it an outrage that Congress reviews economically significant regulations to see if the Executive is actually implementing what they passed? Tim Bishop voted against the REINS Act. This is another case of Democrats focusing on piddling regulations while saying “hands off” the really impactful ones.

Manufacturing Jobs

Another caller asked the Congressman about manufacturing jobs. He patted himself on the back for helping to bail out the auto industry. He said if he and others hadn’t done that that hundreds of thousands of jobs would be lost. I addressed the implausibility of this in an earlier post. In that post I argued that if GM and Chrysler went bankrupt and even if they didn’t come out of it leaner and meaner, people still needed transportation. They would buy Fords, Toyotas, Nissans, Hondas, etc., that are currently built here in the U.S. Those car companies would need to increase their purchases from suppliers and those who formerly supplied GM and Chrysler would be well situated to supply the remaining car companies. The argument that we don’t manufacture here anymore is a myth. On a dollar volume basis, we still manufacture more than any country on earth. A few miles from where I am writing this, in Georgetown, Kentucky, is the largest Toyota factory outside of Japan. Due to a free trade agreement with South Korea that the Democrats blocked for years, that Toyota plant will begin exporting about 6,000 Camrys a year from Kentucky to South Korea.

One of the reasons we don’t build more here is our lousy tax code. Fix it. A reason there is not more manufacturing in Mr. Bishop’s district on Long Island is high electric rates. Factories run on power and power on Long Island is expensive. One of the reasons for that is that government approved the building of a $5 billion nuclear power plant on Long Island, and then when it was ready to throw the switch, they changed direction and said it couldn’t open. So Long Island rate payers had to find and buy electric from other sources and pay for the mothballed plant that produced nothing. Once again, the government helping us out.

But Tim Bishop has a solution. He wrote a bill to ban offshore call centers from federal contracts or loan guarantees for five-year. Nothing like micromanaging a corner of the economy while the rest of it burns. Why not look to the root cause? Tax structure, too much regulations, ObamaCare, out of control government spending. If Congress would fix those problems maybe companies wouldn’t look offshore to set up call centers.

The Budget

Tim Bishop also touched on the deficit and debt. He said we need to cut spending, but he never said what he would cut; he said we needed to control entitlement spending, but he didn’t say how he would do that; and he said we needed to add revenue, but he knew exactly how to do that, tax the rich. Here’s how I see it. The government got us into this mess by spending too much money, they should get us out of it by spending less money. Asking for any more tax revenue is just shirking their responsibility for which they are paid handsomely, and passing the problem on to us. Who couldn’t solve the problem with enough money?

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

Photo by cursedthing

We saw the beginnings with the Battle of Wisconsin. The one place were unions were growing robustly was in the public sector, surpassing the private sector for the first time in 2009. But then 2010 happened.

With states’ fiscal situations worsening and the runaway spending in Congress, voters across the country turned to Republicans, or should I say, the Tea Party. Promising to return to Constitutionally limited government and to go to Washington and state capitals, not to start a long new career but to fix the problem, the Tea Party backed candidates wasted no time getting to work.

From Chris Christie in New Jersey to Scott Walker in Wisconsin, they did not flinch from taking on the public sector unions. They knew that the current trajectory was unsustainable. In Wisconsin, the unions descended on Madison and threw everything they had into the fight. Democrat senators fled the state to prevent a quorum from voting on Governor Walkers measures, union thugs took over the state capital building, inflicting millions in damage to the people’s property, tried to defeat a conservative judge so that the law, if passed, could be struck down by the court, and if that didn’t work they tried to recall six Republican senators at the ballot box. All measures failed, Walker’s policies were implemented and job growth in Wisconsin started chugging along.

In other states like Ohio, Tennessee and Indiana similar setbacks for unions were proceeding more quietly. Meanwhile in the private sector, which has only about 7% union representation, the next major showdown is coming to a head.

The United Auto Workers’ contract with GM, Ford, and Chrysler expires on September 14th. It will be interesting to see how this plays out. As written in a previous post, the unions will be sitting on both sides of the bargaining table, as the Obama administration granted them large chunks of GM and Chrysler stock as part of the bailout package, while stiffing the bond holders, and now the unions as labor will be negotiating with the union as owners. And if they drive GM and Chrysler out of business again, who gets stuck with paying for the cleanup? That’s right, the American taxpayer. Why?

Because the Obama administration couldn’t keep their nose out of the automobile business, thinking if their didn’t bring their collective genius to the limited intellect possessed by the average business owners, how on earth could the auto companies ever function? They should have let the bankruptcy courts handle it, but they decided to drag the rest of us into the mess and now we own a stock that is worth about $31 per share that must climb to $52 for us to break even.

So will the unions commit suicide by making unreasonable demands, drive the auto companies out of business and at the same time kill their own investment in their stock? Or, will they quietly get rid of all of their stock before they trash the auto companies and then demand that the government step in again and bail them out?

Get ready to take it in the neck again, America. The most inexperienced president in US history with his most excellent panel of advisers who never worked in the private sector are about to tell the rest of us how it is supposed to all work. Brace for impact, my friends.

That’s my opinion; I’l 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.

Photo by wstera2

Obama has a jobs plan, or so we are told. He will unveil it after he returns from Martha’s Vineyard. I hope it is a little more detailed than his budget plan to cut $4 trillion that no one can find by meticulously searching the Oval Office. I don’t even know what is in the plan and I have a better one. Stay in Martha’s Vineyard, Mr. President. Set a goal to play eighteen on every PGA sanctioned golf course in the country. Don’t you have some friends and family in Hawaii that miss you?

If we can just keep you out of Washington, so we’re not grappling with your non-leadership, leadership, things may not get a whole lot better until November 2012, but at least they might not get worse. Anyway, isn’t that your new campaign theme, “Just Imagine How Bad It Could Have Been! Vote Obama”?

Take North Carolina for example. Boeing opens a factory there to build its 787 Dreamliner. It hired 5,000 workers and they are ready to go. Then along comes our helpful friends in Washington from the National Labor Relations Board. They say, “Oh, no, this is retaliation. Boeing asked the unionized workers in Washington state for a moratorium on strikes and the union reasonably said they wanted Boeing to promise to never manufacture anywhere but Washington state and Boeing refused. How DARE they?!” So not only did Boeing add 3,000 jobs in Washington state, somehow opening up another factory in South Carolina, a Right to Work state, is retaliation. In an economy crawling along with unemployment stuck at north of 9% Washington is killing 5,000 jobs. When our intrepid leader, President Obama was asked about this he boldly proclaimed that the NLRB was an independent agency and his hands were tied. The President of the United States meekly says he is powerless against a panel of five bureaucrats.

If you asked some of those pesky evil Tea Party freshmen over in the House of Representatives who haven’t spent their entire lives in government service, they would probably say, give us a shot at it. First, we will drain their budget to $1; second tell Boeing to go ahead and make the NLRB’s day; and then sit back and see what action the NLRB will take with $1 in the petty cash drawer. Next step would be to legislate the Department of Labor out of existence, and the NLRB along with it. There are plenty of agencies in the individual states to take up any slack.

Other Award Winning Jobs Moves by the President

As we watch oil rig after oil rig sail out of the Gulf of Mexico to friendlier climes, the Obama administration’s mismanagement of the BP oil spill fiasco adds to the misery. Thousands of jobs were lost or put on hold. Trouble in the Middle East, disruption of oil production in Libya, we should increase domestic oil production but roadblocks to that keep getting thrown in the way. No, green energy is the answer as we watch another heavily subsidized solar energy company file for bankruptcy sending more workers to the unemployment line.

The American people are still waiting for GM stock to his $53 per share so we can break even on this wonderful investment. So how does Washington help? Let’s start by punching a bigger hole in the deficit by subsidizing the Chevy Volt to the tune of $7,500 per car in tax credits. Oh, that’s bad. No, that’s good. Chevy can’t sell them, so there won’t be much in the way of tax credit damage to the budget! Instead, the Obama administration comes out with new CAFE standards to require car companies to produce cars that get 54.5 miles per gallon by 2025. If that doesn’t drive a stake through the heart of GM and Chrysler and saddle the American people with more debt, nothing will. With a $2,000 per car disadvantage over their foreign rivals GM and Chrysler are not going to be able to make small, light cars capable of this standard competitively. Well at least we’ll put those workers on unemployment slowly over the next 14 years.

How much more punishment can this economy take until we put President Obama on permanent retirement? So, please, Mr. President, I would rather you work on your golf handicap than give our economy more handicaps than it can handle.

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

In the July 4 issue of National Review we have this follow-up on the stimulus.

“In a speech at Chrysler’s Toledo plant celebrating his administration’s ‘successful’ bailout of the company, the president invoked the multiplier effect by pointing out that saving the plant had helped Chet’s Restaurant, a Toledo institution since the 1920s, to stay open. A few days later, Chet’s announced that it was closing; the owner laid equal blame on the current hard times and Ohio’s 2006 enactment of a smoking ban.”

More than two years after the official end of the recession our economy limps along. We are overtaxed, overregulated by busybody governments at all levels, that believe their superior intellect and beliefs should be impressed on the drone populace for their own good. What was that phrase? “Give me liberty…”

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

Actual Unemployment vs. Stimulus Sales Pitch

It was a very close race, one of the last decided in the country. Out of 180,000 plus votes the final margin of victory was just under 600 votes. In that election Tim Bishop successfully managed to hide from his record and instead he took advantage of a late Republican primary that was hotly contested and pounced with a campaign of personal attacks on his opponent that was just enough to carry the eight weeks until Election Day. His opponent, Randy Altschuler, wants a rematch and it appears the race will be decidedly different.

Bishop’s campaign theme, oddly enough, was that Altschuler was an entrepreneur who created jobs both here and abroad. Only he conveniently left out the part about jobs created here.  In the middle of an economy with high unemployment and a woefully inexperienced administration in charge, it seemed an odd point of attack, but what else did Bishop have? Could he brag about his vote for ObamaCare? He needed a police escort to get him out of a town hall meeting where he tried to explain that vote. Could he brag about the stimulus? We were told that without the stimulus unemployment would rise to 9% while implementing it would cap unemployment at 8% (see chart above). Bishop dutifully voted with Nancy Pelosi for the stimulus and unemployment soared. Most people would conclude that the administration was wrong and the stimulus actually made things worse.

In his Congressional district, the share of the $787 billion that was borrowed for the stimulus from places like China that will have to be repaid by his constituents is roughly $3 billion, however the amount of stimulus dollars that came to the district is between $600 – $700 million. In effect, Congressman Bishop voted for a stimulus program that failed and saddled his constitutents with an additional $2.3 billion in debt to pay for stimulus dollars given to other Congressional Districts.

Mr. Bishop’s ignorance of basic economics explains a great deal of his misguided policies. In defending his bailout of the automobile companies, he says that if he hadn’t done that, we might have had one million more people unemployed. This is economic hogwash, as I point out here and in my book, Liberty’s Lifeline. The left clings to what is called static analysis. What does that mean? It means that no matter what happens people won’t change their behavior.

Picture yourself standing under an umbrella in a rain storm. If someone takes away your umbrella what will you do? You will probably seek some other form of shelter as soon as you can. That is dynamic analysis. You lose your umbrella, you immediately look for a substitute. The left believes that you will continue to stand there in the rain and get soaked. That is static analysis. Under static analysis, the government works. Under dynamic analysis the free market works. Static analysis says that if you raise tax rates, you will collect more money and if you lower tax rates you will lose money. Free markets have proved that lower taxes increase people’s incentive to produce and therefore increase total revenues. Static analysis says that if there are one million people employed by GM, Chrysler and their suppliers, if GM and Chrysler go completely out of business, one million people will be unemployed. Free markets say that people still need transportation. If GM and Chrysler go out of business, poeple will buy from Ford, Toyota, Honda, et. al, and those companies will need to increase production to meet the demand from former GM and Chrysler car buyers. Therefore they will need more employees which they can find from the pool of people just laid off from GM and Chrysler. Will it be all of the former employees? Probably not. Will it be the disaster that Tim Bishop says he prevented? No. But Tim Bishop who spent his entire adult working life in academia or government doesn’t understand this. And since he doesn’t understand economics he has and will continue to vote for bad ideas like the stimulus.

Tim Bishop says he is fighting high gasoline prices with his “Big Oil Welfare Repeal Act.” On his website introducing the bill he says that he is fighting $4 a gallon gasoline prices with this kind of bill. A few lines later on the same web page, he says the bill will have no effect on gasoline prices. So why is he wasting Congressional time with such a measure when we are facing national bankruptcy? Simple. It fits into a nice thirty-second sound bite that he can feed to the public when he runs for re-election, letting them believe he is doing something serious when he is not.

To give you a sample, here is the latest from Tim Bishop’s spokesman, Jon Schneiderman.

Randy Altschuler would rather launch baseless attacks than give a simple yes or no answer whether he supports the Republican budget to end Medicare as we know it. Maybe Randy can go to Brookhaven National Lab and talk to the 1,000 workers who have a job today because Tim Bishop fought the Republican budget, and tell them where he stands on the issues.”

So there you have the crux of Bishop’s weak reelection strategy. Questioning Bishop’s record is a baseless attack. With a budget deficit of $1.5 trillion that Tim Bishop helped create by voting with Nancy Pelosi 97% of the time and Bishop is fighting to keep spending high? The Democrats have no plan of their own (Obama’s budget was defeated in the Senate 97-0) on how to cut spending and that is a defensible position? Medicare is broke. Tim Bishop voted to cut $500 billion in Medicare funding with ObamaCare and now reforming the system before it goes bankrupt is a bad idea? As far as Brookhaven Narional Labs, we all feel for people who lose their jobs, and there are plenty of those stories to tell. But the folks at Brookhave National Labs are government employees, and the govenment in in dire financial shape. So Tim Bishop fights to keep spending high to save 1,000 government jobs, hands the bill to the rest of his 710,000 constituents who must deal with this administration’s disasterous economic policies and he thinks this is leadership?

It’s time that Bishop and Schneiderman start talking about and defending Tim Bishop’s record and what he thinks we should to to get the economy moving again. He squeaked into office in 2010 and things have gotten worse since. In stead of spending time crafting sound bites that can patch over his poor record in Congress it is time to get our country back on the path to success and get Washington out of micromanaging out lives.

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

On a report that his challenger from last fall, Randy Altschuler, may be looking at a rematch, Tim Bishop’s team wasted no time throwing away all pretense of what they preach to get back in the gutter to revel in the politics of personal attack.

What Bishop Says

In a speech on the floor of the House during consideration of a vote to repeal ObamaCare, Congressman Bishop had this to say:

“Mr. Speaker, I believe it is time this Congress does what President Obama called on Americans to do last week: approach our debates and our differences with civility and honesty. We appear to be doing reasonably well with regard to civility, but less so with honesty.”

What Bishop Does

Jon Schneider, Tim Bishop’s spokesman responded to the report of a rematch with juvenile name calling:

“Randy Outsourcer couldn’t win in a once-in-a-generation year for Republicans,” writes Jon Schneider, the spokesman, using the campaign’s negative nickname for Altschuler. “While Tim Bishop will be able to run in 2012 on his record of fighting House Republican efforts to cut 1,000 jobs at Brookhaven National Lab, Randy will remain a fatally flawed outsourcer with a track record of getting rich by shipping American jobs overseas.”

“Randy Outsourcer”? That is hardly civil nor honest. It is the kind of discourse you would expect in a grammar school lunchroom or schoolyard.

The Facts

Congressman Bishop’s main argument for reelecting him was that his opponent created a successful company that provided services to businesses and some of those services were provided from offshore locations. We live in a global economy, but don’t let facts get in the way. Will Mr. Bishop tell Canon, USA, to close their North and South American headquarters in Melville, which employs 1,200 Long Islanders, because everyone knows outsourcing is bad? Let’s send those jobs back to Japan where they belong! How about SRI, a German manufacturing and engineering giant looking at Long Island; or WiseCon and Surikat, two Chilean companies? Let us not forget all the foreign based auto companies that employ tens of thousands of Americans here in America. Go home foreigners!

But don’t look too closely at Bishop’s record. After all, he voted for the bailout with taxpayer money of GM and Chrysler. After getting our money Chrysler announced the construction of a $570 million engine plant in Mexico. GM for their part quickly announced that they were increasing their offshore production by 53%. These are high paying manufacturing jobs. So what does Congressman Bishop have to say about his proclivity to outsource using not his own money and taking risks on his own, but with our money? I’m still waiting on a response to the letter I sent to him nearly two months ago asking that very question.

Perhaps it is just a lack of understanding of economics. A study by Dartmouth’s Amos Tuck school of business found that for every job outsourced overseas, two new jobs were create here. In a global economy it is foolhardy to try pick and choose among products based on their country of origin. In 1989, I bought a Ford Probe GT. It was built by Mazda, in Canada, but Ford owned 25% of Mazda. So what was it? Who cares? Pursuing this line of thinking will take us back to the days of Smoot-Hawley tariffs that plunged us deeper into the Great Depression, but that shouldn’t be surprising. The progressives, like Tim Bishop, are doing everything else to mimic the Great Depression.

Time for a New Strategy

It is interesting that Mr. Schneider picked Tim Bishop’s current efforts to save the jobs of 1000 workers at the Brookhaven National Labs. He doesn’t mention his votes for ObamaCare, the Stimulus, the auto bailouts. While saving 1000 jobs is admirable, what about the rest of the 700,000 citizens in his district. He just wants to hand them the bill. Since government has no money except that which it gets from its citizens through taxes, every big government program has an invoice that has to be paid. Take, for example, the stimulus. His constituents share of that bill is about $3 billion. He “successfully” brought home $679 million according to www.recovery.gov. That would be like getting a $679,000 house for “free” with a $3 million mortgage attached to it. Are there any takers out there for that deal?

Next time around Mr. Bishop may actually have to run on his record, but let’s leave the taunts and childish names behind and have an adult debate on the issues. The people of the district deserve as much.

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

I received an e-mail from my congressman touting his efforts to fight outsourcing. In a global economy, it escapes my why this is a good thing and why we need more businessmen in Congress and fewer professional politicians and academics. So I penned the following response.

February 7, 2011

Congressman Tim Bishop

306 Cannon H.O.B.

Washington, D.C. 20515

Dear Congressman Bishop,

I recently received your e-mail update regarding your ongoing battle against outsourcing. I must confess that I am confused as much by your efforts here as I was during your successful reelection campaign. You say, “That is why I am fighting so hard to reduce job-killing outsourcing.” I find that to be an oxymoronic statement. According to the American Heritage Dictionary, outsourcing is defined as, “The procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs,” which implies that it would create jobs.

Do you, Congressman, make all of your own clothes or do you outsource that to others? Do you grow all of your own food, or do you outsource that to others? And if you do outsource these and many other things, for if you don’t how would you have time to be a Congressman, what steps do you take to make sure none of your clothes are made overseas or that none of your lettuce is picked by illegal immigrants?

Is it your goal to make America a nation of lettuce pickers, or seamstresses? Is it your goal to make our clothes cost twice as much as they do today so that working families have to spend more of their take home pay on clothes because you insist that clothes only be made in American factories that would have the double edged effect of raising the cost of the clothes and not paying very high wages. Or should we focus on jobs for engineers to design computer controlled looms that we can sell to these counties?

In a study by Matthew Slaughter of Dartmouth University, he found that when companies increased overseas employment by 2.8 million jobs, these same companies increase domestic employment by 5.5 million jobs. In other words, for every job outsourced overseas, two jobs were created here and those jobs were higher skilled with higher pay. So if your claimed objective is to create jobs in the U.S. why are you opposed to one of the most effective ways to do that?

Okay, let’s assume that you don’t believe any of the foregoing and that any company that creates jobs overseas is evil and anyone who supports it is dead wrong. Then perhaps you can explain how you supported the bail outs of GM and Chrysler? After getting taxpayer money, both companies increased their outsourcing. Chrysler built a $570 million engine plant in Mexico, and GM increased its share of cars it builds overseas by 35%. If it is bad for private companies to be global enterprises, and therefore unfit to receive any government contracts, why is it alright to take taxpayer money and give it to companies so that they can create jobs overseas? Isn’t that hypocritical?

Let’s say further, that you are successful in your campaign to end outsourcing. What do you think will be the reaction of Toyota, Honda, BMW, Volkswagen, and other companies who employ tens of thousands of workers here in America because outsourcing was a good idea? Do you tell all of these workers that their jobs should really go back home to workers in the headquarters country?

So where do you really stand on outsourcing in a global economy? Is it bad for private enterprises to outsource, but it is okay for the government to take taxpayer money, take over a private company and then outsource jobs? I would appreciate it if you could clear that up.

Sincerely yours,

 William R. O’Connell

Thankfully, his efforts were defeated in the House.

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

The latest news on the economy is not encouraging: a mere 39,000 jobs added and the unemployment creeps ever closer to 10% at 9.8%.  In spite of this, or apparently ignorant of it, the lame duck House voted yesterday for another whopping tax increase on the most productive among us. Yes, yes, they will beat the class warfare drums about tax “cuts” for the rich, when what they are voting on is not a cut at all, but either leaving things the way they are or raising taxes.  With the recovery barely showing a pulse, it is not the time to take money out of the hands of free market capitalists and put it in the hands of the government.  Who do you think can pull the economy out of the doldrums, entrepreneurs or government bureaucrats?

The “We’re For the Little Guy Myth”

We learned yesterday that Peter Orzag, the former White House Budget Director, may be taking a job at Citibank.  You remember Citibank, they got $45 billion in a taxpayer bailout.  The actual job is unimportant.  What is important for Citibank is having a guy on the payroll who can call the White House and they’ll take his call.  They guy who replaced him as budget director, Jacob Lew, worked at Citibank from 2006 to 2009. 

How about some more cronies?  There is former Treasury Secretary under Clinton, Robert Rubin who became an executive-committee chairman at Citigroup.  Treasury still owns 11% of Citi stock.  As Obama raked in the campaign cash from Goldman Sachs, we have Timothy Geithner’s replacement as head of the New York Fed, William Dudley, was a former chief economist at Goldman Sachs.  Former Democrat senator and Governor Jon Corzine was a previous chairman of Goldman Sachs.

But don’t worry the Democrats are looking out for the little guy.  They ignore Fannie Mae and Freddie Mac in the financial regulations overhaul and hand the bill to the little guy.  They bail out GM and Chrysler, turning over the bulk of the company’s ownership to the unions and hand the bill to the little guy.  TARP money goes to foreign banks to cover their losses and they hand the bill to the little guy.

Crony Capitalism Reality

The reality is that Progressives like crony capitalism.  After all, how can they possibly mount effective political campaigns without money?  From the little guy?  Forget it.  They make deals with big business.  They protect the big guys from competition from the free market capitalists and the big guys pour money into Democrat coffers.  Think of all the money that flowed into Wall Street.  Why?  Because they were “too big to fail”.  How many small and mid-sized banks were shuttered?  Since 2008 there have been 314 bank failures in the U.S., only 18% of those had assets of over $1 billion. 

The big guys can take enormous risks and if they pay off they make enormous profits and personal wealth for their management.  But if the risks don’t pay off, do they go out of business?  Hardly.  They go to the government with dire predictions of a collapse of the economy unless the government steps in and when it does, the bankers get their big bonuses and the little guy gets stuck with the bill.

Meanwhile Back at the Fed

If the Democrats are not trying to destroy the economy through fiscal policy, then they give monetary policy a try.  Take a look:

httpv://www.youtube.com/watch?v=PTUY16CkS-k

The New Congress

The Republicans are ready to take control of the House in January and narrow the majority of the Democrats in the Senate.  They have stumbled badly before when they were in the majority, but in their four year timeout, it appears they have learned something.  They seem to be on the right track and we hope they remain so.  We’ll be watching.

There’s good news and bad news coming out of the Tim Bishop campaign.  The good news is that he has a new ad out so we don’t have to keep watching the same ad he has been running incessantly for the past five weeks.  The bad news it’s about the one subject that Tim Bishop wants to talk about, outsourcing.  It’s the same old stuff, wrapped in a new package.  Why can’t Tim Bishop talk about his record?  Is he embarrassed by it or afraid of it.

Okay, if outsourcing is the subject, let’s talk outsourcing.  In Mr. Bishop’s ads he accuses his opponent, businessman Randy Altschuler, of outsouring jobs.  While it is true Mr. Altschuler created a company that created jobs overseas that provided business services to U.S. companies, he never closes the sale by actually linking jobs lost here as a direct result of the jobs created overseas.  He just leaves it to the viewer to draw the conclusion.  Very clever.  From some of the blogs and newspaper comments I have read there are a number of people who have jumped to that conclusion.  Liberty’s Lifeline looked into it and reported on the flaws in making that connection.

But what about Tim Bishop and jobs that he is responsible for outsourcing?  Tim Bishop voted for the bailout of GM and Chrysler.  At the time Liberty’s Lifeline advocated letting the companies file for bankruptcy on their own and not bail them out with taxpayer money.  But the bailout went forward.  Shortly thereafter GM announced that it was increasing the percentage of cars that it was building overseas.  The Detroit News said this:

“GM’s plan to import more vehicles from low-wage countries raises questions about whether it should beef up its foreign operations as it is relying on federal money to stay afloat.”