At the conclusion of Newt Gingrich’s speech as CPAC a colleague and I discussed the Republican chances for the White House. That day we heard from Rick Santorum, Mitt Romney and Newt and we both agreed that winning in the fall should not be hard. But a couple of conditions had to be met.

The most important condition of all was that no matter who won the nomination, we all had to coalesce behind the nominee and fight hard to win. What that means is that Mitt and Newt have to stop the scorched earth personal attacks. So far, Santorum has avoided getting down in the mud, but with his new ascendancy, he will now be a prime target. Stop it and stop it now. It’s not about you. It’s about dislodging the guy at 1600 Pennsylvania Avenue. Tell us about your vision and stop hanging labels on each other. Forget the polls showing Obama beating all comers. In January 1980, Gallup had Carter beating Reagan 63% – 32%. This is how Time magazine saw it March of that year:

National opinion polls continue to show Carter leading Reagan by an apparently comfortable margin of about 25%. They also show that more moderate Republicans like Ford would run better against the President. This suggests that Reagan is not the strongest G.O.P. choice for the November election and that he clearly faces an uphill battle. . .

Carter, for all his problems, has the power of incumbency. As President, he can react to challenges by changing the direction of the whole Government, which he has done recently by attempting to balance the budget in the coming fiscal year, a course urged by all Republican candidates. Carter is an undeniably deft—and extremely lucky—politician. He also is a relatively known quantity in the White House, whereas the inexperienced Reagan would require a definite leap of faith by voters supporting him. Says Northwestern University Political Scientist Louis Masotti: “There’s a variation on the old cliché: you don’t change horses’ asses in midstream. You’ve got one, and at least you know its contours.”

Newt Gingrich

Gingrich was on his game at CPAC. He clearly outlined what he would do, within hours, of taking the oath of office. It was vintage Newt. It was Contract with America stuff and the crowd ate it up. This is the good Newt, who is very good. Besides putting down the sword against Romney, Newt needs to clean out his closet. Whatever he did for Freddie Mac, whether good or bad, get it out there now. Just saying you were a consultant is not enough. You can bet the Democrats know what he did and if it looks bad they will protect it like it is gold in anticipation of Newt winning the nomination. Then they will devise a scheme, with their allies in the main stream media, to release it about two weeks before the general election so that it will have maximum negative impact against Gingrich and the Republicans.

If Gingrich can get any bad news out now it will die down and be old news by election day. There is a risk, that it may kill his chance at the nomination, but for the sake of the country, it is better sooner than later.

Rick Santorum

Santorum has done a good job of laying out the moral argument for his candidacy. He has to shift his focus more on where he wants to take America rather than in the dismal place we find ourselves. He has to take a cue from Reagan and Thatcher and express an optimism that will engage his fellow Americans.

He has to avoid joining the Romney – Gingrich food fight. So far he has stayed above the fray, but he is climbing in the polls and that makes him a prime target, particularly for the Romney attack machine. He has to stay clean and ride the wave of disgust that people are feeling for all the mud-slinging.

Mitt Romney

Romney has to stop the attacks. He seems to be the one to fire the first spit ball. In one of the debates, when Santorum called for a ceasefire, Gingrich seemed inclined to go along, but Mitt couldn’t resist one last shot, which Gingrich naturally could not leave alone and off we went. Negative campaigning does work up to the point where we become sick of it and then it is a pox upon all your houses.

Romney also has to loosen up and lose his perpetual sunny disposition, that seems somewhat manufactured. It would be refreshing to see him without the perpetual smile and see some genuine concern for his fellow Americans who are having a tough time. If he doesn’t connect with the common folks, he will never climb above the 25% or so that typically vote for him.

Coming Together and Being Gracious

To get everyone to close ranks behind the eventual winner, we need to care for the ultimate losers. Toward that end I would like to propose a fallback job for each of the four remaining candidates in the administration of the winner. Here they are.

For Ron Paul, I would suggest appointing him Chairman of the Federal Reserve Bank. He could then freely find out what the heck they are doing there and make recommendations up to and including ending the Fed. For Newt Gingrich, I would suggest appointing him UN Ambassador. What better way to follow up a speech by Ahmadinejad than a critique by Gingrich destroying everything the little weasel said? For Rick Santorum, Secretary of State. He seems to understand there is more to the world than just the Middle East and that we have some work to do in our own hemisphere. For Romney, I would suggest Secretary of the Treasury. Bain Capital was not Goldman Sachs. I think between his finance background and his government executive experience as governor of Massachusetts, he could greatly help get us on the right track.

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 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.

As I check the current price of GM stock this morning, $31 per share, and I contemplate how in the world it is going to reach the $53 per share price Americans need to fully recover their “investment” in the automaker, a recent news story lays it on the line. It’s not going to happen. The Obama administration has announced that it is demanding that auto companies double the mileage that their fleets get, to 56.2 miles per gallon, by 2025.

Once again we have the statists thinking that they are the smarter version of soviet planners who can demand that the wind blows, the sun shines, and the seas fall, and can just order that private industry do something and it will be done. As I point out in my book Liberty’s Lifeline, U.S. auto companies have about a $2,000 per car disadvantage relative to their foreign competitors due to health care benefits. So unless people think environmental green is superior to the green in their wallets, they are not going to pay a premium for high mileage cars. After all, the point of a high mileage car is to save on  the rising cost of gasoline, but if you never get the savings because the of the high price of the car, why do it. The clear example of this is the Chevy Volt.

The Chevy Volt is a $40,000 electric car, that is General Motors pride and joy. To encourage people to pay the ridiculous sticker price, the government offers a $7,500 subsidy, that is, you pay for the privilege of your neighbor driving his green car. The good news is that March sales were more than January and February combined. The bad news is that March sales were a total of 608 cars. For the first quarter the number of Volts sold totaled 1,210, compared to 50,000 for the Chevy Cruze.

GM makes money when it sells a Cadillac. Ford makes money selling F-150 pickup trucks. But the government has to get involved and tell these companies that they must sell cars in a sufficient mix that their Corporate Average Fuel Economy (CAFE) meets the government mandate, which will rise to the aforementioned 56.2 miles per gallon.

The market consists of demand for a variety of vehicles. Some companies can produce small, light, high mileage vehicles. Others can produce stronger, heavier trucks and luxury cars. Who is Washington to say what each can build? Let the market decide. If gasoline prices continue to rise, the car company that can continue to build high mileage cars will do well. GM and Chrylser are caught between the unions and a hard place. Their higher labor costs put them at a serious disadvantage in the low end, high mileage market and then Washington says that they have to sell more cars in that space to hit the CAFE averages. It is a recipe for disaster. But don’t worry, you have their back. You wallet is just a stroke of the pen away from this administration doling out more money to their friends and sticking you with the bill.

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.

Tim Bishop continually bashes his opponent on the topic of outsourcing jobs.  One of Mr. Bishop’s brilliant solutions, brilliant because it was conceived of in the halls of academia and Congress rather than at the helm of a company, is to raise taxes on companies foreign operations.

At the same time Mr. Bishop and his fellow travelers rail against businesses that are sitting on piles of cash rather than hiring and investing.  Since he probably doesn’t know how to read a balance sheet, I will enlist the aid of John Chambers, CEO of Cisco Systems and Safra Catz, President of Oracle who spell it out in the Wall Street Journal.

The U.S. is among a dwindling number of developed countries that still tax a corporation’s global earnings and apply the home country’s tax rate to them.  For most other countries their companies apply the local country’s tax rate to the earnings in that country, which are paid to the host nation.  Since the U.S. also has the highest corporate tax rate among the developed countries at 35%, it puts foreign operations of U.S. companies at a significant competitive disadvantage against companies based in other countries.

To address this disadvantage, the U.S. government allows companies to take a credit for the taxes paid in the local country and defer the taxes on the difference between that rate and the U.S.’s 35% rate.  However, when those profits are repatriated back to the U.S., the deferred taxes come due.  Here is an example.

Let’s say Ford and Volkswagen build operations in Poland to serve that market and let’s say they both make $10 million in profits.  On the profits that they make in Poland, which has a 19% tax rate, Ford will be taxed 35% by the U.S. government as part of its worldwide earnings.  Germany does not tax its companies on a global basis, only on their profits in Germany.  Both Ford and Volkswagen will pay 19% to the Polish government or $1.9 million.  Ford will get a credit for the $1.9 million it pays to Poland and will defer the taxes on the balance $7.1 million ($10 million – $1.9 million = $7.1 million) until the profits are brought back into the U.S.  At that time the deferred profits of $7.1 million will be taxed at the 35% rate or another $2.8 million bite.

Tim Bishop sees the current situation as encouraging U.S. companies to outsource jobs to foreign markets because they can defer paying taxes until the money is brought home.  His solution is to make a bad situation worse by taking away the deferral and hitting U.S. companies with the full 35% or in our example $3.5 million in taxes as soon as it’s earned.  This would put these companies at a significant cost disadvantage to their competitors and lose business to them.

Chambers and Catz point out the other side of the problem where all these profits that could be working back in the U.S. are locked outside of the country.  Why?  What sane business leader would subject their earnings to a 35% tax bite by bringing the earnings back when bond rates are at 4%?

A solution that would work and would free up cash to help get the U.S. out of its economic hole would be the following. 

1. Change the method by which U.S. corporations are taxed from worldwide to territorial.  We are among five developed countries that still tax corporations worldwide vs. twenty-five countries that use the territorial method
2. Lower the corporate tax rate from 35% to be more in line with other developed countries who have been cutting their rates over the years (Germany 30%, United Kingdom 28%, Korea 24.2%, Ireland 12.5%)
3. Chambers and Catz favor a small tax 2%-5% on repatriated earnings, which could be an alternative to eliminating deferral, but if the overall corporate tax rate is lowered, deferral becomes moot.

But don’t expect Mr. Bishop to latch on to this idea.  He is working too hard to maintain his zero approval rating from the business community, and his 97% lockstep voting record with Nancy Pelosi.  If there is a way to get those dirty, filthy profit making companies (that provide most of the jobs in this country) to pay more taxes, then Tim Bishop is for it.  The government can’t expand it’s programs and redistribute your wealth without taking more from those who produce.

Just remember this.  Public sector jobs are paid for from the taxes of those in the private sector.  Without companies making profits there would be no jobs and no taxes from the private sector.  If we only had public sector jobs, we would be essentially paying ourselves to work.  How long do you think that system would last?

I’d like to know what you think.

I don’t know who Linda McGibney is, so when a friend tweeted a video she was in rebutting Ben Stein on the fast approaching massive tax increase, I first watched the video and then went about Googling her to find out more about her.

The video begins with a clip of Ben Stein saying basically that if you want to consider raising taxes in the future that may be fine, but right now is not the time to do it, it is just punishment.  The video then cuts to Ms. McGibney, who like Barack Obama, begins to lecture us about what she knows so little.

“Ben Stein is wrong,” she intones.  She continues to describe herself as an American, in the highest tax bracket, and working in the entertainment business, just like Mr. Stein.  Wait a minute.  From what I could gather, Ms. McGibney is a screenwriter, which hardly makes her an authority on tax matters.  Mr. Stein on the other hand is an economist and a lawyer, besides being in the entertainment field.  His father was Herbert Stein who served as an economist in the Nixon administration and Ben Stein was a speechwriter for both Nixon and Ford.  So when it comes to speaking on matters, economic, I would tend to defer to Mr. Stein.

It becomes clearer when Ms. McGibney misses the whole point and assesses the issue on a purely personal level.  She talks about her taxes and her ability to pay them, and says the same holds true for Mr. Stein.  Mr. Stein’s point was not about the taxes unfairly punishing him, boo hoo,  but about a $700 billion increase in taxes as the economy staggers out of the recession under the weight of all the spending Mr. Obama has committed us to.

She goes on to parrot Joe Biden, about paying more taxes being our patriotic duty.  You probably recall Mr. Biden saying, when President Obama put him in charge of making sure the stimulus money was not squandered, that he himself knew little about finance or economics.  She then scolds us that she is not talking about charity, before proving the well known fact that conservatives give more to charity than liberals/progressives, by saying as much.  “This is about being a grown-up and accepting the fact that we made money during the bogus uptick in the economy,”  Continuing, “I suppose he [Stein] thinks he is beyond sharing his good fortune with the rest of Americans who are suffering financially.”  From each according to his ability, to each according to his needs.  You have been schooled well, grasshopper, in the ways of Marx.

She says, “I have always understood that the ‘haves’ are greedy,” before continuing a few words later to say, “I am a ‘have’.”  She just called herself greedy!

Ms. McGibney, we still have some freedom in this country and while we do you have every right and ability to send a check for as large as you like to the federal government, you are not required to stop at that line on your tax form that has your tax liability.  You are not allowed to give less, but feel free to give more.  May I suggest 90% of your taxable income?  Better yet, why don’t you host a little party of your like minded friends and suggest that they do the same in the name of “Hope and Change?”

But the reality is the policies of the current administration have burdened the economy with such uncertainty that even Nancy Pelosi can’t figure out the laws that she’s passing (we have to pass the bill to know what is in it).  There is so much uncertainty, that small and medium businesses are not hiring because they can’t figure out what their health care will cost, what their taxes will be, how much new regulation they have to deal with, and on, and on.  The recession ended over a year ago and instead of roaring back the economy is slowing down.  The stimulus did nothing.  The recession ended before the money hit the streets.  But now the economy is saddled with an $800 debt to pay back and you want to pile another $700 billion rock on top of this feeble recovery?

Ben Stein is speaking as an economist.  You are speaking as a self righteous, greedy, partisan.  You are as clueless about what to do as this administration is.  Go back to writing screenplays.  I hope they are successful.  If you want to do your part, hire an assistant; give your staff a raise; eat at a restaurant every night; buy a new car.  I would rather that you take your wealth and spend it lavishly than turn it over to the government, which will only waste it on trying to get themselves reelected.  Join the free market.  If we get the government out of the way, this economy will come roaring back.  If we keep sending money to Washington it will only encourage them.

I, for one, am glad that all those people you see at Tea Party rallies, that you and your cranky friends like to mock, are better informed about how the economy works and the proper role of government than you will ever be.  I hope that they will change Washington.  It’s the spending, stupid.

Click the link to see the video. Linda McGibney Lectures Us on Paying Taxes

There is panic in the ranks of the left this Halloween.  In today’s Times, Frank Rich, does his level best to whistle past the graveyard, but the fear is clear.  He astonishingly titles his piece, “The G.O.P. Stalinists Invade Upstate New York.”  I guess they feel the Hitler moniker has lost its zest, so the leftists resort to calling those on the right, Stalinists.  Their disorientation could not be more palpable.

What has them in such a tizzy?  It centers around the special election in New York’s 23rd Congressional District.  The local Republican party bosses chose a candidate, Dede Scozzafava, who would never be mistaken as a conservative, although Mr. Rich actually called her, “a mainstream conservative by New York standards.”  That’s like saying David Letterman is chaste by liberal standards, as if these things are measured on a relative scale.  But that’s the way liberals and statists think.  If your neighbor is more promiscuous than you, then you must be celebate.  If you want to make Nancy Pelosi a moderate, move her to Cuba.

Ground Shift

What has Mr. Rich and his cohorts nervously clearing their throats, is that the uprising against the entrenched statists, led by the Tea Parties, actually delivered results.   Ms. Scozzafava is pro-abortion, pro-same-sex marriage, pro-Obama stimulus package, pro-card check to make it easier to form a union without a secret ballot election, and supported by ACORN.  This is what Mr. Rich calls a conservative, “by New York standards.”  What sticks in his craw is that the election was a win-win, for him and his friends.  Elect the Republican or the Democrat and it doesn’t matter much, they both hold the same basic views.  Then along came Doug Hoffman.

Doug Hoffman threw his hat in the ring on the Conservative Party line.  By this Saturday, with support pouring in all across the country from true conservatives, Hoffman was in a dead heat with the conservative and the Republican Scozzafava was fading fast.  So she decided to suspend her campaign, and Mr. Rich and company hit the panic button.

So how does Mr. Rich frame his argument?  Well he starts by saying Hoffman has no grasp of local issues.  Uh, the position is United States Congressman, not city alderman.  He well understands the issues at the national level and how the policies of the Obama Administration are bankrupting the country.  Those policies will negatively affect the people in his district.  But leave it to Mr. Rich to scoff at Hoffman, because he doesn’t know how much pork barrel spending the district needs. A true patriotic Congressman, like John Murtha, finds a way to build an airport in the district that nobody uses and hands the bill to people in other districts like, well, New York’s 23rd.  He’s going to Washington to fight those who are bleeding the Treasury dry.  So Mr. Rich fights that by calling Fort Drum, home to the U.S. Army’s 10th Mountain Division, a “pork-dependent military base.”  Hmmm…the last time I read my copy of the Constitution, it specifically required providing for the national defense.  I couldn’t find in my copy where it required building airports no one needed so that John Murtha could get re-elected in perpetuity.  I understand it is a fine distinction, but I would have thought someone employed by the New York Times would be able to make it.

Frank Rich’s Happy Talk

Mr. Rich oddly calls the developments in New York as good news.  With a recent Gallup Poll, showing that for every self-described liberal there are two self-described conservatives, Mr. Rich says the ideologues that brought about the events in New York’s 23rd, may then start picking off other conservatives and destroy the party.  Does he mean conservatives like Arlen Specter, Lincoln Chaffee, Olympia Snow, Susan Collins, Charlie Crist, oh my!  With 73% of GOP voters saying that Congressional Republicans have lost touch with their base, this is not good news for Mr. Rich and company.  What he believes is that a small cabal of conservatives will put unelectable candidates on the ballot that voters will reject and the Democrats will gleefully reap the rewards.  In reality, the GOP leadership has for too long put weak candidates on the ballot that Democrats easily beat because the Republican base cannot get excited about them.  McCain is a war hero and worthy of our admiration, but just look at his signature legislation:  McCain-Feingold, McCain-Kennedy.  He was not a conservative on many fronts. 

Nixon was a conservative, Ford was not.  Reagan was a conservative, Bush 41 was not and  Dole was not.  George W. started more conservative than not, but then drifted to become a big spender.  McCain was not a conservative.  Do you see a pattern here?  Conservative Republicans win.

With Obama’s approval rating going down in a virtual straight line, Mr. Rich confidently proclaims that the only politician Obama has to fear is Hamid Karzai in Afghanistan.  By all means, Mr. Rich, you keep telling your pals that.

Stock Market Leads the Way

As I write this the stock market is up nearly 200 points, and it has risen in each of the last three months.  Commodity prices are rising based on encouraging manufacturing data from abroad.  Personal incomes rose 0.5% in April.  Chrysler could exit bankruptcy as soon as Monday.  Citigroup and GM are removed from the Dow Jones Industrial Average, replaced by powerhouse Cisco and Travelers.  Ford motor’s shares rose 4.9% on news that it plans to expand production in the third quarter to try to gain market share from its rivals, and without government money.

The Stimulus Flop

Less than 10% of the $780 billion stimulus package has been spent.  President Obama told us we desperately needed or we may be mired in this recession/depression for years .  The free marketers said that this economy is strong enough to recover on its own, which the statists sneered at.  Government created this mess by their meddling in the housing market and how they mishandled interest rates and the money supply but we were told that “only government” can get us out of it.  More recently President Obama, who has been trying to spend every dime Congress will let him get his hands on has said we are out of money. Here’s a thought:  repeal the rest of the stimulus and get out of the way of the strongest economy on earth.

Things to Ponder

• Obama opposed bankruptcy for GM and Chrysler.  Free marketers said it should be allowed to happen.  That’s how the free market works.  After pouring billions of taxpayer dollars into these two, where are we?  Both are in bankruptcy.
• Bankruptcy for GM and Chrysler would be an extraordinarily long and drawn out process costing millions of jobs and killing the auto industry in the U.S.  Where are we?  Chrysler may emerge from bankruptcy as early as Monday, Ford is ramping up for the third quarter.
• Without the stimulus package, we were told the unemployment rate could hit 9% by 2Q2010, whereas with the stimulus it will peak at 8% at the 3Q2009.  Where are we?  It is now at 8.6% and we are in 2Q2009.  The stimulus passed, little has been spent and the administration has been wrong again.  The free marketers say that unemployment will likely rise quickly and if left alone, the recovery will happen more quickly.  If the government meddles and tinkers, we will likely see what happened in the 1930s where this drags on for years.
• President Obama says we’re out of money.  So stop spending.  Repeal the stimulus that is accomplishing nothing because the bulk of the spending isn’t due to happen for another year or more.
• Watching the Information Technology job boards, I see a big rise in the job postings for sales people.  When companies are confident that the economy is turning, they step on the gas for sales to beat the competition.  The operational folks will soon follow.

If the Obama administration is not careful and doesn’t reverse course before he bankrupts us, we may be faced with accelerating inflation and sky high interest rates.  Shall we get nostalgic for the days of Jimmy Carter?