Fighting to Preserve Liberty in America
Democrat Tim Bishop recently sent an e-mail to his constituents blaming Republicans, although they only hold the House while Democrats hold the Senate and the White House, for being against bipartisanship. So what does Tim Bishop do when the opportunity for bipartisanship presents itself? He cements his far left credentials by voting against it.
Chuck Schumer by DonkeyHoley
Today in New York City, the bastion of blue, in the bluest of states there is an upset in the making. Republican Bob Turner is leading Democrat David Weprin for the Congressional seat vacated by the disgraced Anthony Weiner, a protegé of Senator Chuck Schumer.
Two-faced can be such an overused term, but on the other hand two doesn’t seem to be enough to capture Harry Reid.
The New Year has begun and hopefully, we haven’t broken all our New Year’s resolutions yet. There is still a lot of talk about fairness and inequality. It is the last best hope of a message for the progressives and it is time we did take a look at fairness.
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money. – Unknown (often attributed to Alexis de Tocqueville)
An article in The Hill newspaper titled “Teachers union expands playing field for midterms” describes how the teachers’ union is getting out supporting certain candidates.
In New York we have the unusual situation of voting for two senators in the same year. Chuck Schumer is the incumbent running for reelection and Kirsten Gillibrand was appointed to the Senate to fill Hillary Clinton’s vacant seat when the latter became Secretary of State in the Obama administration. So in some respects, Ms. Gillibrand is running for the Senate for the first time rather than as an incumbent.
As a Congresswoman in 2007 she was a member of the “Blue Dog” coalition of conservative Democrats. In the Senate Ms. Gillibrand has been quiet as a church mouse. Perhaps that is because she doesn’t want people to notice her metamorphosis from a moderate Democrat from upstate New York with a 100% approval rating from the National Rifle Association to another far left Harry Reid “pet”, voting with the Democratic leadership 97% of the time. Now that she is in the Senate she has been endorsed for election by a leading gun control group which the NRA strongly opposes which prompted this response from the NRA
“She was either being dishonest with her voters in the congressional district or she’s being dishonest to the voters in New York state,” said the NRA’s chief lobbyist, Chris W. Cox. “Either way, the key word is dishonest.”
Gillibrand’s spokesman had no comment.
Ms. Gillibrand voted in favor of giving stockholders a vote on executive compensation in corporations. Does she favor giving Americans a vote on her and her colleagues’ compensation? In July 2009, she voted yes on a Congressional pay raise. So we need to keep those greedy corporate types in check, but she gets to vote herself a raise? But that’s not all; when as an attorney she represented corporations she had a very different role. As an attorney representing Philip Morris her job was to keep the Department of Justice from finding out that Philip Morris’ own research showed that tobacco was harmful.
“So when the Justice Department tried to get its hands on that research in 1996 to prove that tobacco industry executives had lied about the dangers of smoking, the company moved to fend off the effort with the help of a highly regarded young lawyer named Kirsten Rutnik [now Gillibrand].” – New York Times, March 26, 2009
Call it inconsistent, but whatever you call it, Ms. Gillibrand doesn’t like to talk about it.
In the August 23, 2010, New York Times, Paul Krugman decries that if we don’t let the Bush Tax cuts expire and thus have a massive tax increase in the midst of a weak Obama recovery, it will be so unfair, so evil…
First let’s look at how twisted the logic of the left has become. Mr. Krugman says, “These same politicians are eager to cut checks averaging $3 million each to the richest 120,000 people in the country.” Er, not really, Paul, unless the richest 120,000 people are stupid enough, with all their financial advisors, to have that much tax withheld from their incomes. You see, Paul, the only reason the government would have to cut them checks is if they paid too much in taxes during the year, and since the current rates are already in place it is unlikely that they would change their behavior to suddenly have an extra $3 million sent to Washington. Here’s the problem with your thinking, Paul. It is not your money, it is not my money, it is not the government’s money to begin with. It belongs to the people who have earned it. It is the people to provide revenue to the government. It is not the government who gives money to those who produce. Got it?
Like most on the left Mr. Krugman always associates tax cuts with a loss of revenue and tax increases with a gain in revenue, and ignores how people change their behavior with regard to these changes.
As this chart shows, at the end of the Clinton administration and the dot.com bubble the economy fell into recession. The Bush tax cuts were implemented in 2001 and they were across the board tax cuts, not just for the wealthy. A second set of tax cuts came in 2003. As you can see revenues started to fall before the tax cuts, but bounced back sharply after the cuts in 2001 and 2003. But Mr. Krugman would have you believe that if you cut taxes, revenues fall and if you leave them along or increase them, revenues increase. You can also see that Clinton’s tax increase in 1993, didn’t have much effect in changing the rate of revenue growth, but when the Republicans took over Congress in 1994 and instituted tax cuts in 1997 you can see the slope of the curve bend upwards and it is even steeper with the Bush tax cuts. So in the absence of the 2001 recession, revenues collected increased with tax cuts, not tax increases.
Let’s look at who is paying what share of the taxes. The follow chart shows what percentage of the tax burden was paid by what percentile of the income earners by Adjusted Gross Income.
| Year | Top 1% | Top 5% | Top 10% | Top 25% | Top 50% | Bot 50% |
| 1999 | 36.18% | 55.45% | 66.45% | 83.54% | 96.% | 4.00% |
| 2007 | 40.42% | 60.63% | 71.22% | 86.59% | 97.11% | 2.89% |
So even as the Bush tax cuts reduced tax rates across the board, the “evil” rich still ended up carrying a larger share of the overall tax burden than they did before the cuts. So just what is Mr. Krugman’s beef?
I argue that were are nearing a dangerous threshold politically, where the majority of voters may soon find they pay no taxes and the minority pays all. If that tipping point is reached, what is to prevent this majority from voting for massive tax increases that will only affect the minority? All Americans should carry some share of the cost of government. It should not be a free ride for some and a minority pays the tab.
To further emphasize the fairness issue look at the following chart from the IRS in 2004. The brown bars show the share of the income that the percentile on the vertical axis earns. The blue bar shows the share of the total income tax bill they pay.
The problem folks is spending. As the first chart makes pretty clear, we have not been suffering from a revenue problem, we have been suffering from a spending problem. This administration and their instigators, like Mr. Krugman, have been urging reckless spending upon reckless spending and even decrying that the administration has not spent nearly enough. Krugman is sloppy in making his case and tries to convince his readers that we will be carrying buckets of money to the wealthy when the truth is that he wants to open the spigot wider from those who produce in this country to the profligate government who can then spend it on more turtle crossings in Florida, and to prop up the unions, and bankrupt states. Stop spending, cut taxes, shrink the federal beast, and we will be in good shape in short order.
As many people have said, “I never got a job from a poor man.” In looking back at my own career, I have worked for several companies that were started by entrepreneurs and who became wealthy. Do I care if they were wealthy? No. Do I wish they were taxed to the eyeballs? No. If they were, those are jobs I would probably wouldn’t have had. Opportunity is what made America the country where people around the world fight to get into, not bashing the successful. All who stive to come here want to become those wealthy successful people and give the same opportunity to their children.
In today’s New York Times there is a story about Rick Lazio latching on to the Ground Zero mosque issue as his new campaign theme. The first television ads I have seen regarding his run for governor are about this issue. He is strongly opposed. Okay, but he wants us to elect him governor to do what, exactly? New York has a lot of problems, from a state government that is completely dysfunctional to being broke and since everyone seems to agree that the mosque at Ground Zero is not about the right to build there but about the propriety of building there, what does it have to do with the office of governor?
When he pinch hit for Rudy Giuliani running for the senate against Hillary Clinton, after Mr. Giuliani dropped out of the race with prostate cancer, Mr. Lazio took a similar tack. You probably remember their first debate when Mr. Lazio famously walked across the stage to a startled Mrs. Clinton and asked her to sign his pledge on campaign finance reform. She refused and that was his theme. The problem is that although many people feel our political process is corrupt, when it comes to campaign finance reform, most people don’t care about it. Those who care about it are incumbents, who want to cripple those who run against them. Some of the so called “reforms” have politicians spending so much time chasing $50 donations that they can’t do what they were elected to do. Either that or we can only run multi-millionaire candidates who can spend their own money without limits. (Simple solution: let anyone contribute any amount to any campaign at any time and just post the information on the Internet within 72 hours in a database that is fully searchable. Done.) It only took a little time for the novelty of the debate video to fade and Mr. Lazio had no campaign.
Another challenger in this year’s governor’s race, Carl Paladino, one of the aforementioned millionaires, has been hitting the airwaves more frequently and more effectively than Mr. Lazio. He is not a one trick pony. His first ads hit Andrew Cuomo on being a career politician and that he, Paladino, was a business man who knows how to create jobs. What do we desperately need now? Jobs. What are we sick of? Career politicians, like Mr. Cuomo, who played a role as HUD Secretary in the Clinton administration of feeding the real estate frenzy and the subsequent housing collapse that created the financial crisis.
On the mosque situation, agree or disagree with him but Mr. Paladino says exactly what he will do about it. He will take the property away under Eminent Domain (thanks to the activist judges on the Supreme Court who gave us Kelo v. City of New London) and use the property to create a war memorial. He doesn’t just say he will oppose it he tells us what he will do about it.
In the interest of full disclosure, I contributed to Rick Lazio’s senate run in 2000 and I have no connection with the Paladino campaign. But if Mr. Lazio is serious about defeating Andrew Cuomo for governor, he has to find some issues that not only resonate with the people of New York but that are the responsibility of the governor to address. If not, rather than split the conservative vote, he should step aside and help ride the anti-incumbent wave that Carl Paladino is surfing.
An article in today’s New York Times is just one more, “Don’t let a crisis go to waste,” move from this administration. The article, titled “As Oil Industry Fights a Tax, It Reaps Billions From Subsidies,” uses the same tired talking points to justify another tax increase that will ultimately be passed along to consumers.
The article talks about how the oil companies take advantage of tax credits and breaks and then it also talks about how many oil based companies re-incorporate in countries like Panama, the Marshall Islands, the Cayman Islands, and Switzerland because it will lower their taxes. When with the Statists get it? If you raise taxes both corporations and people will change their behavior to lower their taxes. Impose a millionaire’s tax in Maryland and Maryland discovers they have one-third fewer millionaires a year later and hundreds of thousands of dollars in less revenue. Impose among the highest tax rates in the developed world on businesses and businesses will move to where the taxes are lower. Create tax breaks and then somehow the Progressives are surprised that companies took advantage of them.
The initial thrust of the article was that the tax on oil companies was necessary to pay for the cleanup of the oil spill in the Gulf. Pardon my confusion, but didn’t the government just get BP to pony up $20 billion into an escrow fund for this purpose? Hasn’t BP said from day one that they will pay the cost for the clean up? So why are the Progressives in Congress rushing to put a new tax in place other than to take advantage of a crisis to reach into your wallet?
Another unintended consequence of our onerous tax policy is that when companies incorporate in other countries, those countries often have lower engineering and environmental standards.
I am no fan of corporate welfare so why don’t we take the IRS code and run it through a shredder? Get rid of the tax breaks across the board. Lower the tax rate to a fixed number that is on par with other developed countries. According to the Heritage Foundation, the freest economy in the world is Hong Kong, which oddly enough is located in Communist China. The Chicoms were smart enough to leave well enough alone when Hong Kong reverted to their control from Britain in 1997. Their individual tax rate is progressive ranging from 2% to 17% or an option for a 15% flat rate depending on which liability is lower. The top corporate tax rate is 16.5%. Their five-year compound annual GDP growth rate is 5.7%; unemployment is 3.5%; and their inflation is 4.3%. By comparison, our top corporate tax rate is 35%, more than double that of Hong Kong; our five year compound annual GDP growth rate is 2.2%; unemployment is 9.4% (at the time of this study); and inflation is 3.8%.
If we could implement real tax reform it would not only simplify our lives, save several hundred billion dollars in compliance costs, reduce uncertainty for business, create jobs, and grow the economy. With a larger pie, overall tax revenues will also increase.
In that Heritage study the United States has the eighth freest economy in the world, down one place from the year before; not the direction we should be going. Imagine if we set a goal to become the freest economy in the world. Americans like a challenge so let’s set our sights on becoming number one. The first three to concentrate on passing are those directly in front of us: Canada, Switzerland and Ireland. On this Fourth of July, let’s plant our flag and get to work.
An in depth article in the New York Times titled, “Lapses Found in Oversight of Failsafe Device on Oil Rig,” covers at length the problems surrounding the technology and methods employed to prevent the disaster that we see every day on our television screens, newspapers, and the Internet. It also points to the nearly complete lack of oversight and enforcement by the federal government to protect us. Politicians like to write legislation and put flowery titles on the same and gather for the cameras for signing ceremonies, but when it comes to the heavy lifting of enforcing the laws put in place they often fall down on the job.
When disaster strikes the typical Washington reaction is to add more regulations that eventually become so complex and contradictory that compliance becomes nearly impossible (e.g., Internal Revenue Code). In the case of the oil spill in the Gulf the article points out that studies were conducted in 2003, seven years ago, on failure points to prevent the situation we are living with today, but no requirements to put them in place or test them were instituted.
The article focuses on a device called a blind shear, whose purpose is, in the event of an accident like what happened on the Deepwater Horizon, to activate a pair of shear blades to cut the pipe that rises from the well and seal the well shut. The reliability of single blind shears has only proved to be about 46%. With this empirical data, new wells are installing two such devices for redundancy and backup. Such a recommendation was made to the Materials Management Service (the government agency regulating drilling) in 2001, nine years ago, but the MMS took no actions on the recommendation. In 2003, the MMS received a recommendation that would require the necessary underwater robots and testing of emergency backup systems, but again the MMS, demurred. The practice has been that the MMS simply took the drilling industries word that they were taking steps to prevent problems.
In 2003, the Deepwater Horizon rig has a problem in a storm that caused the rig to break away from the well it was drilling, the blind shear worked perfectly in that case giving the company a false sense of confidence in the technology. What happened next is revealing:
The following year, BP opted to remove a layer of redundancy from the blowout preventer. It asked Transocean to replace one of the blowout preventer’s secondary rams with a “test ram” — a device that would save BP money by reducing the time it took to conduct certain well tests. In a joint letter, BP and Transocean executives confirmed that BP was aware that the change “will reduce the built-in redundancy” and raise Transocean’s “risk profile.” – New York Times, 20 June 2010, pA1
Since the MMS did not require two blowout preventers, BP was in the clear to remove one. Also, consider the term “risk profile,” and think of this in terms of a free market where insurance companies played a role. If you increased the risk profile and didn’t want to have your policy canceled in its entirety for hiding that fact, the insurance company would no doubt increase BP premiums for the increased “risk profile.” Since this effort was a cost saving measure, having to pay more in insurance might have changed the equation such that BP would leave things as they were with two blowout preventers. But the government encouraged deep water drilling, the government put a cap on the amount of damages that a drilling company would have to pay that created a moral hazard, the government ignored recommendations to required greater safety measures and the government was lax in enforcing those regulations it had in place, instead relying on taking the industry’s word that all was well.
On a separate issue regarding the cleanup, in an article in the Wall Street Journal titled, “The President Does a Jones Act,” it states that in the two weeks following the disaster, thirteen countries contacted our government offering assistance with the clean up. Our government turned the offers down. As the State Department put it:
“While there is no need right now that the U.S. cannot meet, the U.S. Coast Guard is assessing these offers of assistance to see if there will be something which we will need in the near future.” One month later, many of these offers are still outstanding. – Wall Street Journal, 19 June 2010
The Belgians reportedly have the ships and technology that could clean up the mess in the Gulf in one-third the time than is currently estimated. All it requires is suspending the Jones Act of 1920. Bush did it almost immediately in the wake of Hurricane Katrina so that foreign ships could come in and provide temporary housing for the hurricane victims. Officials in the Obama Administration weakly respond that “no one has asked them yet,” to suspend the Jones Act. What are they waiting for? Doesn’t Obama and everyone in his administration to hit the Sunday talk shows tell us that they has been on top of this since day one? One plausible reason for the hesitation is that it might offend the maritime unions.
We are continually told by this administration that we need more government expertise telling us how to run our lives. Surrender your liberties, we’ll take care of you. I don’t think so. What do you think?
