Category Archives: Economy

O’Reilly and Beck Completely Miss the Point

Last night on The O’Reilly Factor, Glenn Beck responded to O’Reilly’s stupid idea for a two percent “temporary” national sales tax by proposing an even more asinine idea.  Beck suggested a two percent Value Added Tax (VAT) instead, apparently feeling a need to one-up O’Reilly’s ridiculous and naïve idea.  After taping the show, they probably left the studio to go play chicken with each other in fast cars on some quiet suburban street full of children.

Clearly, anyone who is not watching the turnip truck drive away while picking gravel out of their posterior can see the flawed logic on display here.

In O’Reilly’s case, the notion that any national sales tax would be temporary, or held at 2% for that matter, is simply ludicrous and is an insult to the intelligence of anyone who has observed politics for more than a month.  Furthermore, the very notion of adding a tax like that with the expectation that it will generate any real revenue demonstrates a lack of understanding of how the tax system influences behavior, particularly in a recession.

Glenn Beck’s proposal is equally stupid but has the added feature of making the taxation far more insidious and dangerous.  Value Added Taxes, like the corporate income tax so beloved by statists and the myrmidons with whom they play simplistic and dishonest class warfare games, add the far more dangerous reality that the taxes simply get hidden in the prices of products and services, allowing the levitation government to covertly connect yet another tick to the neck of productive America.  At least O’Reilly’s idea involves a tax that we can see, though the notion of any tax being “temporary” ranks right up there with the ludicrous idea that ObamaCare will help with the deficit and the economy.

I propose a simpler idea, one that may be too clear for smart guys like O’Reilly and Beck.  Let’s stop the spending.  At a time when so many Americans are struggling to pay their mortgages or keep their old cars running long enough to get back in the black with their personal finances, a proposal to raise taxes on any Americans is patently absurd.  Bill and Glenn, like so many American politicians, sit up on their ivory pedestals without any memory of what it is like to be a regular middle class American.

Furthermore, we need to reduce subsidies to those who were getting a free ride before the recession hit.  How much money could we save by canceling the euphemistically named Earned Income Tax Credit and any other tax credit programs that simply transfer money from the productive to the non-productive?

I submit that any increases in taxes right now would only hurt the economy and the Americans who fund our system, and are the equivalent of treating a hangover by imbibing a little “hair of the dog”.  Additionally, I humbly submit that since we have so many people hurting who were not societal parasites before this recession, we can longer afford the luxury of continuing to subsidize the lifestyles of people who were living off of us before the economy tanked.  For a deeper discussion of which groups get a free ride and which groups are societal parasites in America, check out a piece that I wrote for my other blog titled On Taxes and Socialism.

Glenn Beck and Bill O’Reilly could really stand to read Milton Freidman’s Free to Choose.  They would learn a lot.

America’s Self-Punishing Corporate Tax

In a short post over at CATO@Liberty, Daniel Mitchell comments on a new KPMG global survey of corporate taxes, pointing out the obvious fact that it punishes American companies for keeping jobs in America.

KPMG has released its annual global survey of corporate tax systems. For the 10th consecutive year, the average corporate tax rate fell, and it is now down to 25.5 percent — and just 23.2 percent in the European Union!

In the United States, unfortunately, the corporate tax rates remains stuck at about 40 percent. Only one developed nation, Japan, has a more punitive regime.

That’s something to keep in mind the next time a politician complains that jobs are going to China, where the corporate tax rate is 25 percent.

Take a look at the KPMG survey data here.  It is interesting to contrast what some other countries are doing compared to the US.  From the KPMG survey:

Country 2003 2004 2005 2006 2007 2008 2009
US 40 40 40 40 40 40 40
UK 30 30 30 30 30 28 28
Russia 24 24 24 24 24 24 20
Germany 39.58 38.29 38.31 38.34 38.36 29.51 29.44
Canada 36.6 36.1 36.1 36.1 36.1 33.5 33
India 36.75 35.875 36.5925 33.66 33.99 33.99 33.99

Note the far more sensible response to the economic downturn from countries like the UK, Russia, and Germany.

Corporate taxes are simply indirect taxes on individuals, essentially hiding the staggering scale of the cost of government by building it into the cost of goods and services.  When you hear politicians in the US talk of a possible Value Added Tax they are looking for more of the same, dishonestly hiding the costs of government in the prices that consumers pay for the items that they buy every day.

Clearly the best thing that could happen for American taxpayers would be the abolition of corporate taxes and the income tax, replacing them with something like the FairTax.

Wynn Teaches Basic Economics to Gov. Granholm

In what was a lively discussion on Fox News Sunday, Steve Wynn responds to Michigan Gov. Jennifer Granholm’s stubborn defense of President Obama’s stimulus package by giving her a very brief lesson in basic economics:

If we had taken the tax-cutting response to this recession the economy would be in much better shape today.  But our ideologue-in-chief could not do something like that, so utterly anathema to everything in which he believes.

Charles Gibson: Spinning for Obama

ABC News Anchor Charles Gibson

ABC News Anchor Charles Gibson

On Monday night Charles Gibson continued doing his tough job of spinning for the Obama administration.  After starting with Jake Tapper’s report on the health care debate, anchor Gibson did what he has done time and time again: spin horrible economic news positively for the Obama administration.  On the October 12th World News Tonight, Gibson said this:

Most economists say the recession is over and a recovery is underway.  That’s the view of 80 percent of experts in a survey by the National Association for Business Economics.

Then Gibson immediately moved on to other news.  As so often seems the case, Mr Gibson only reported the shred of data that could conceivably look good for Obama: the fact that 80 percent felt that the recession is over.  Given that this is a survey done by an organization that has been around for fifty years, one would expect that they would ask more than one question, perhaps gleening more than one simple data point.  Lo and behold, that does appear to be the case!

First, look at this graph, drawn from the results of the survey’s question asking when the jobs would return:

CNN Money chart_job_recovery

Note that only a total of 7.7 percent of the economists surveyed believed that we would recover the lost jobs by the end of 2011, more than two years from now!  I am just a programmer who spent 10 minutes doing internet research to find this data but I would argue that it is highly pertinent to the intentionally shallow story peddled by Mr. Gibson about the rosy end of the recession.

A cynical person could safely assume that Mr. Gibson simply cherry-picked the news that was good for President Obama and left out the parts that were not good for Mr. Obama.  In fact, it would take an exceedingly gullible person to believe that Mr. Gibson was not being intentionally deceitful in his reporting of this story (par for the course for Charlie).  It would seem that those people still under the spell of the Obama personality cult think that defending him serves some higher purpose.

In Gibson’s defense, he may just be a talking head who reads from the teleprompter (sound familiar?) and may not be responsible for the content that he repeats.  It seems apparent that Jake Tapper and Nick Schifrin do all the real journalism on that network, freeing up people like Charlie Gibson to be advocates for the Left.

This reminded me of a good report at Newsbusters a couple of weeks ago.  In case you are under the impression that this is an isolated incident of Gibson’s advocacy journalism, take a look at the following video which compares the reporting of a 9.4 percent unemployment rate under Obama to that same number under President Reagan in 1983.  Conveniently enough, it is the same so-called journalist (Charlie Gibson) doing both stories!

1982 – President Reagan (R) – 9.4% unemployment

” There really isn’t any good news in the statistics, all of the numbers are bad” … “450,000 more people are unemployed than were a month ago.  For Democrats it’s an issue ready-made.” — Charles Gibson

2009 – President Obama (D)- 9.4% unemployment

“In the current economic environment, sometimes the bad jobs report can look good.  345,000 American workers lost their jobs in May.  A big number to be sure, traumatic if you are one of the 345,000, but the number was smaller than economists had predicted, and that’s good news.” — Charles Gibson

Newsbusters published a report on this oddly different reporting of the same jobs numbers, relying on a report from the Business and Media Institute.  Some of their conclusions:

Network Reports 13 Times More Negative Under Reagan than Under Obama: An overwhelming majority of stories mentioning the Reagan administration were negative 91 percent (20 out of 22) while only 7 percent (1 out of 15) of Obama administration mentions were negative. Additionally, Obama mentions were favorable 87 percent of the time, but there were zero positive mentions of Reagan.

 Networks Connect Reagan White House to Negative Jobs Numbers Almost Twice as Often as Obama: Unemployment stories in 1982 mentioned the Reagan administration 71 percent of the time (22 out of 31), but 2009 stories mentioned the Obama administration only 40 percent of the time (14 out of 35).

Charles Gibson: 9.4% Unemployment ‘Good News’ (Obama) and also ‘All’ Bad (Reagan): The unemployment rate reached 9.4 percent under Reagan and Obama. But ABC’s Charles Gibson covered the identical rate very differently in 1982 than in 2009. Gibson told viewers May 7, 1982, “[T]here really isn’t any good news in the statistics. All the numbers are bad.” But by 2009, Gibson had turned into an optimist citing “good news” June 5 and “hope the economy may be finally turning the corner” Aug. 7.

I think that Charlie Gibson gets that same thrill running up his leg that Chris Matthews has so embarrassingly described.  Both men are nothing more than partisan hacks, but at least Matthews is not taken seriously as a journalist.

The Crisis-Response Cycle

This started out as a short post simply pointing to this AEI this video but it got a little wider in scope once some caffeine got involved.

In this short 4-minute video, the American Enterprise Institute’s Peter Wallison explains the causes of the financial crisis in very plain terms, arguing that this was driven on the front end by government housing policy.  Based upon this, Wallison argues that proposed regulations to prevent this again are unnecessary as long as government does not create the problem again.  A couple of quotes:

If the crisis was caused by the government’s housing policies, it was not caused by any inherent weakness in our financial or in our regulatory system, let alone as the left has been contending: an inherent weakness in capitalism. 

Unless the government embarks on more foolish housing policies in the future, this crisis or crisis like it will not in my judgment occur again.

Watch the video, it’s only 4 minutes long.

This example of government policy resulting in massively unintended consequences, followed by more government, is not unique.  Statists in both parties are simply doing what statists will always do.  H. L. Mencken observed that such people will consistently try “to keep the populace alarmed” in order to grease the skids for their own agenda.

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary. — H. L. Mencken

When one sees a repeated pattern of government interference creating a problem only to be followed by more government meddling to fix the problem originally caused by that same government, one has to assume that 1) they think that we are idiots, 2) we are idiots, or 3) both.  Those of you who picked option #3 go to the head of the class.

The Crisis-Response cycle: the government rides in on a white horse to solve the problems that were caused by that same government, perhaps in some previous crusade.

This same cycle of statist thinking, ignoring the results of previous interference while acting as if history started the day that they took office, is occurring in the health care debate.  The government allowed millions of illegal aliens to flood into the US with access to our health care system.  The government refuses to reign in the slip-and-fall lawyers (thanks, Party of Change), and many government imposed mandates including prohibitions on interstate insurance coverage have resulted in rising costs.  But the results of this are being used as fuel for the push for, you got it, more government control.  At the very least your intelligence should be insulted.

POTUS was and remains the problem

President Obama was out campaigning in VA and threw out a whopper:

“I expect to be held responsible,” Obama said. “But I don’t want the folks who created the mess to do a lot of talking. I want them to get out of the way so we can clean up the mess. I don’t mind cleaning up after them, but don’t do a lot of talking.”

President Urkel

President Urkel

Of course I know that this is typical.  Leftists will always pretend that history started yesterday.  One has to ask the question as to why Freddie and Fannie gave so much money to politicians like Barney Frank and Chris Dodd and, yes, Barry Obama.  Could it be that it was a quid quo pro?

It is certainly hard to hold the president as accountable for the sub-prime crisis as insiders like Dodd and Frank, after all he has not had as much time on the job given his meteoric, media-assisted rise from dog catcher to president.  But all of those guys were at the wheel as Freddie and Fannie required more and more sub-prime loans, creating the market that ultimately collapsed.  The idea that the republicans created this banking crisis is absolute fiction.

But do you think that Obama’s sycophant Charlie Gibson will report that?

Charlotte Tea Party

Charlotte Tea Party, 7-4-2009

Charlotte Tea Party, 7-4-2009

A crowd estimated to be 2,500+ by Mecklinburg county attended the Tea Party protest in Charlotte, NC, on Independence Day.  A good friend of mine attended but was there a little early so his pictures do not reflect the ultimate size of the crowd.

(We had a big one planned for the Atlanta area as well until big Obama contributor Simon Properties used their weight to get the venue yanked just days before the event).

Here are a few pictures that he sent me:

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