American Elephants


Obama Is Not Serious About the Fiscal Cliff. by The Elephant's Child

To listen to the media, you would think this “fiscal cliff” stuff is all about the Republicans being stubborn and refusing to negotiate. The media rhetoric has already lost sight of what the term “fiscal cliff” describes, as Peter Ferrara said.  They talk as if the fiscal cliff is all about the deficit and the point is a tax-increasing budget deal to close the deficit.  But the fiscal cliff refers to the economy falling off the cliff due to the fiscal policies of comprehensive tax rate increases and spending cuts already enacted into law — to go into effect on January 1.

The election was a mere 22 days ago, and Obama is so emboldened by his win, that he’s turning negotiations over to Tim Geithner and going out to campaign some more. We thought that perhaps he was reelected to show some leadership, but he enjoys campaigning more.

Here is the threat: Going into effect on January i are increases in the tax rates for virtually every major federal tax. The tax increases of ObamaCare go into effect. The Bush tax cuts expire which mean huge tax increases. Obama refuses to renew the Bush tax cuts for the nation’s job creators, investors and successful small businesses.

Obama has talked a lot about the rich not paying their fair share. The Occupy crowd of layabouts yammered on about the 99% and the 1%, and the evil corporations. But the Bush tax cuts were smaller for the rich than for the rest, yet even at that, with lower taxes the richest 1% ended up paying $84 billion more in taxes in 2007 than they had paid in 2000 — a 23% increase. Their share of all taxes paid climbed from 37% in 2000 to 40% in 2007.

Millions dropped from the tax rolls entirely. Bush doubled the per-child tax credit to $1,000 and lowered the bottom rate to 10%. Going over the fiscal cliff would reduce the child tax credit back to $500, and tax rates for the middle class and poor would climb.

The GOP says the President is insisting on about $1 trillion in new tax revenues immediately by raising tax rates, plus another $600 billion in net new revenue as part of tax reform next year.  Besides that, he wants $150 billion in new public works “stimulus” spending, $50 billion of it next year, and another extension in unemployment benefits which runs at $30 billion a year. And oh yes, he wants the debt ceiling permanently removed so we can just o on borrowing, assuming that anyone would want to loan money to such a profligate administration.

In return, Mr. Obama will blithely promise some $400 billion in entitlement savings next year — details to come later. Probably cutting Medicare again, or counting the $800 billion he has already taken out of Medicare to pay for ObamaCare as a saving.  Add that up.  This is supposed to reduce the deficit. This is not serious, and is almost insulting.

Obama wants to tax the rich some more, which everybody who isn’t rich supports. And he claims that this will pay down the deficit and the nation al debt., which has now soared past $16 trillion. Obama has admitted to being bad at math, but there is no excuse for being this bad. Mark Thiessen has listed the top ten things Obama’s $82 billion tax hike on the rich would buy:

  1. 8.5 days of federal spending ($3,504 billion annual budget)
  2. Food Stamps for one year ($81 billion)
  3. The budget of the U.S. Postal Service for just over a year ($70.5 billion budget)
  4. The U.S. Intelligence budget for about 1 year ($75.4 billion budget)
  5. The cost of Hurricane Sandy in NY & NJ (current est. $71 billion++)
  6. Just 4 months interest on the debt ($258 billion annual budget)
  7. Just under one-tenth of the 2009 “stimulus ($830 billion)
  8. 6.6% of Social Security/ Medicare costs in 2012 ($1,231 billion)
  9. 7.5% of the deficit ($1.1 trillion) or 1 month of borrowing per year
  10. One-third of annual cost of ObamaCare coverage expansion (about $240 billion annually by the end of the decade.

The problems of the fiscal cliff cannot be solved by taxing the rich. It is not even a down payment. We must rein in the spending. Obama has shown no restraint whatsoever in spending, and wants to continue picking winners and losers among the new businesses he likes like electric cars, rewarding the cronies who supported his campaign, and spending lavishly on new employees, Czars, and new ideas. ObamaCare, when fully implemented will have over one hundred new offices and agencies and bureaus. Mr. Obama can’t even show restraint in his private life, planning a $4 million, 17 day vacation in Hawaii.

Mr. Obama is not serious about the fiscal cliff. He believes he can rouse up enough public clamor to put pressure on the recalcitrant Republicans to force them to give in to his demands, with the force of his personality. I don’t know. Even Warren Buffett is turning against him. Though you must remember that Mr. Buffett is an investor, not an economist, and is currently battling with the IRS over unpaid taxes.

In Britain, former Prime Minister Gordon Brown raised taxes on the rich to a 50% rate, and guess what? Two-thirds of British millionaires have left the country. In the 2009-2010 tax year, more than 16,000 people declared an annual income of more than £1  million to HM Revenue and Customs. After Mr. Brown introduced the new 50% top rate, that number fell to 6.000 people. It is believed that the rest either moved abroad, or reduced their taxable incomes to avoid the new levy.

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Technical Difficulties! by American Elephant
November 29, 2012, 10:32 pm
Filed under: Blogging

Sorry for the lack of posts today. We’re having technical trouble with the WordPress blogging interface which we hope to have resolved shortly.

~The Elephants :^)



Cat People and Dog People by The Elephant's Child

Love me, love my idiosyncrasies, accept my nature, for I am a dog.  I am a cat.

(h/t: Vanderleun)



ObamaCare Promises What It Cannot Deliver. by The Elephant's Child

The biggest problem with ObamaCare has always been the possibility that it would be implemented. The bill is so poorly conceived, so poorly written, that it is bound to be a disaster. What will happen when it is actually fully implemented remains to be seen, but everything the government itself was supposed to do has failed. Everything. Failed completely.

  • The CLASS Act: A pathetic attempt to create long-term care insurance was dumped by the administration after it became clear that it was impossible to do.
  • The 1099 provision: Was absurd. It required businesses to issue a 1099 form to any vendor from whom they purchased $600 of goods or services in a year. It was repealed after Business owners explained what an impossible burden it was.
  • Federal high risk pools: Created and funded, but nobody enrolled. Cost too much and was too complex.
  • Retiree health Subsidies: Large corporations and unions were happy to accept free money for what they were doing anyway (providing health benefits to retirees) but the money ran out in a third of the time expected.
  • CO-OPs: Congress put so many restrictions on what was supposed to be a non-profit health plan in each state that none have come into being despite billions being spent.
  • Small employer tax credits: The complexity and confusion of these credits meant than only a handful of companies applied.
  • Medical Loss Ratios:The MLR Requirements had the predictable effect of discouraging innovation and higher-deductible or “mini-med” health plans.
  • Medicaid expansions: The Supreme Court made these expansions voluntary for the states and it looks like fewer than half will do it.
  • Health IT: The HITECH bill was enacted separately from ObamaCare, and billion have been spent, but reports from the field indicate that the top-down efforts result in lower quality and less efficiency.
  • Limits on FSA funding: The families most disadvantaged by the new $2,500 limit on FSA funding are those with special needs children.
  • Limits on the Medical Expense Deduction: Beginning in 2013, a taxpayer will be able to deduct only those medical expenses that exceed 10% of income, up from the current 7.5%. Those most hurt will be the most medically needy families.

The screw-ups have been such a mess that Kathleen Sebelius has issued thousands of waivers issued to selected companies and unions. There were no qualifying standards for who got a waiver for what. All up to the kind of day Ms. Sebelius was having, I guess.

ObamaCare promises what it cannot deliver. The theory was that giving people health insurance would mean that they could get medical care that the uninsured are not now getting. There are not enough doctors, nurses and hospital personnel, in thousands.  The medical professions have become less desirable, large numbers of doctors say they will retire early, or just quit.

ObamaCare does not pay for itself. There is a huge increase in the demand for care, but no increase in supply. Since people will not be able to find doctors, emergency room use will skyrocket. Democrats lied about the cost, but it is far worse than the worst predictions.

ObamaCare mandates and subsidies will destabilize large sections of the economy. Already happening, as most major national restaurants are switching their employees to part-time to avoid having to pay for insurance that they cannot afford.

The incentives are all wrong. Insurers must charge the same premium regardless of expected costs. All plans will have the incentive to attract the healthy and avoid the sick. The incentive for providers becomes getting adequately paid. The incentive for insurers or government is cutting costs.

The individual mandate: If weakly enforced, people will have an incentive to stay uninsured when healthy, enroll after they get sick, then drop coverage when well again. If strongly enforced, it will strain every family budget. There is nothing in ObamaCare that will make medicine or insurance cheaper.

These problems are entirely inherent in the legislation itself, as it was devised.



What Does Barack Obama Want? by The Elephant's Child

Everywhere the talk is about The Fiscal Cliff, and the negotiations. Everyone wants to know what Obama wants. He wants to tax the rich, and Jay Carney has assured us that he will veto any bill that does not tax the rich. Obama is apparently going to go out campaigning to rouse the nation to lobby for the bill he wants passed, his way.

I’ve pointed out that Alan Reynolds said that “Obama doesn’t understand economics and apparently won’t listen to anyone who does.” He also doesn’t understand negotiations. His idea of negotiations is to force you to agree with him. He hates disagreement.

An odd trend has taken place in the United States. The two political parties have grown more distinctly separate, more dramatically opposed to each other. I don’t know why I’m surprised any more, but after the election, there was an outpouring of really angry Democrats, calling conservative talk shows, tweeting, attacking Romney signs or bumper stickers. They won, and we weren’t humble enough, defeated enough, subservient enough. I’ll admit I was really disappointed in the election, but they won, and what was that all about? Why were they so angry about winning? We are not supposed to disagree.

It’s not just that. There are Republican ideas and there are Democrat ideas, and never the twain shall meet. Republican ideas are wrong, lies, false, stupid, and, of course — racist. Republicans like Fox News because it is indeed more fair and balanced. Obama would prefer not to have any representative of Fox in the press corps, or on the plane.  Democrats hate Fox: wrong, lies, false, stupid, and, of course— racist.

Democrats believe in Keynesian economics, that a downturn results from a lack of demand, and to fix it you have to create demand, so they keep trying to pump money into the economy in one way or another, in hopes that people will spend the money and thus jump-start something or other. Doesn’t work, has never worked, but hope springs eternal.

Indeed, Obama’s $800 billion neo-Keynesian stimulus package actually impeded economic recovery. According to John B. Taylor, a Stanford University economist who carried out an in-depth study of the stimulus, the government’s spending did not result in growth and jobs.

“Individuals and families largely saved the transfers and tax rates,” Taylor wrote.”The federal government increased purchases but by only an immaterial amount. State and local governments used the stimulus grants to reduce their net borrowing…rather than to increase expenditures, and they shifted expenditures away from purchases toward transfers. Some argue that the economy would have been worse off without these stimulus packages, but the results do not support that view.*”

“Obama’s own views about what he has, and has not, learned during his four years in the White House say a lot about why he has been a failure as president.*”

The area in my presidency where I think my management and understanding of the presidency evolved most,” Obama has said,”and where I think we made the most mistakes, was less on the policy front and more on the communications front.

You mean he didn’t make enough speeches? The greatest communicator since Ronald Reagan had — a failure to communicate? Well, that’s why he’s going out to rouse the compliant.

Obama’s proposal to raise taxes on the rich would reduce the deficit from $1.1 trillion to $1.02 trillion, maybe. The rich have lots of options, and can rearrange their affairs to pay less in taxes. The rich are moving out of high tax states and taking their businesses with them. They can move their money around too.

The owners of 990,000 small businesses, defined as those with 50 or more employees, report their income on their 1040 tax returns. In response to the new costs of ObamaCare, many are reducing their employees to 49 or less.

President Obama does not believe that small businesses number among “the rich” as Republicans claim. Small businesses are the neighborhood barber, the shoe shop, and the little bookstore. He even made a point of visiting a small bookstore in the capitol, to celebrate small business, this weekend.

So what does President Obama want? He wants to make speeches, because that’s where he’s comfortable. He wants to tax the rich because he believes in redistribution of wealth and believes he has a mandate to do so. He wants more revenue to spend. He wants people to stop disagreeing with him. And he doesn’t think there are any consequences from raising taxes, so as soon as he’s inaugurated for his next term, he’ll slap on a carbon tax, because that’s what his green supporters want. Redistribution of wealth usually turns out to be redistributed to the ruling class, and the poor are just poorer than ever.

Time for Walter Wriston again:

Capital will go where it is wanted and stay where it is well treated. It will flee from manipulation or onerous regulation of its value or use and no government power can restrain it for long.

*Edward Klein: The Amateur



White House Lies About Costs Of ObamaCare by The Elephant's Child

Today the hapless Jay Carney, who came to the post of White House Press Secretary from Time  (formerly Time Magazine) announced that ObamaCare should not be considered for any deficit reduction because “The Affordable Care Act reduces the deficit considerably.”

I would simply point out to you that the Supreme Court has spoken, the American people have spoken, congressional leaders of both parties have spoken and we’re going to continue with implementation.

This White House has its very own facts, which are not to be disagreed with. Their facts are whatever Obama said they are. Obama has admitted to being bad at math, which perhaps accounts for the problem. John Boehner said that the fiscal cliff negotiations need to include Obamacare:

The president’s health care law adds a massive, expensive, unworkable government program at a time when our national debt already exceeds the size of our country’s entire economy.

In March 2010, leading democrats and their media supporters were just “giddy” to report they had crunched some numbers and found the nationalized health care bill they were pushing would reduce the deficit by $138 billion. Perhaps that’s where Democrats come from — all the people who flunk math become liberals. It was, of course, complete hooey. They used phony numbers, counted some things twice, made bad assumptions, and created a huge straw man.

The Congressional Budget Office does good work, but they can give estimates only with the information they are given. That is, they can’t go out looking for contrary evidence, or any evidence. They must devise their numbers with the information that is given to them.

The latest CBO estimate says that ObamaCare , over ten years, will now cost $2.6 Trillion — nearly three times a much as the initial estimate. And it is sure to cost far more. The incentives built into the program are not measured, and they are mostly bad. There are many problems with the bill that remain officially unconsidered, but are huge — like the shortage of physicians to serve Medicare and Medicaid patients. We’re already nearly 50,000 short of the needed doctors, and the numbers who will leave the profession are increasing. The bill funnels ever more people into Medicaid, and demands more time and service from the attending doctor, with no idea where they are going to get the needed doctors. ………………………………………………….. …………..(click to enlarge)

ADDENDUM: Reader Lon Mead corrected me. Mr. Carney was press secretary for V.P. Joe Biden before coming to the White House — after Time. So he has been flacking longer than I thought.



The Edge Of A Fiscal Cliff? How Did We Get Here? by The Elephant's Child

The Phrase “The Fiscal Cliff” has entered the public dialogue, but it is uncertain that very many have any understanding of what it is. Just something scary that might happen because the Republicans are blocking whatever President Obama wants to do, or something like that. According to a new CNN/ORC  poll, 45% say that they would blame Congressional Republicans, while just 34% would blame the President.

You probably remember when the economy took a terrible fall in 2008, when the “Financial Crisis” hit. The financial crisis was the collapse of the housing bubble. It was not caused by the Iraq war, nor by the Bush Tax Cuts, nor even by the Drug program for Seniors.

The Community Housing Act  in the Carter Administration attempted to get more poor minorities into their own homes. It was believed that  people who owned their own homes took more pride in their neighborhoods, and worked for improvements in society like better schools, better community regulations and laws — that sort of thing. Statistics seemed to prove it.

Democrat efforts to provide housing for the poor had often ended up in crime-ridden ghettos — the projects. So they increased pressure to get more poor minorities into their own homes. The Clinton administration gave that a big boost, and  Barney Frank and Christopher Dodd signed on. They put pressure on banks to grant more loans. Banks cited the rules of prudent banking. You can look at household income and expenditures and the payments needed to service a loan, and tell who can and who cannot pay back their loans. Democrats pushed banks, suggesting that they were “redlining” and discriminating against black Americans.

That’s a favorite trick of Democrats — to accuse anyone who disagrees with being “racist.” Community organizers encouraged their people to protest and picket banks.  And yes, that’s what our well known community organizer was doing, but nobody mentions that.

These questionable loans were sold to mortgage giants Fannie Mae and Freddie Mac, who sold them in bundles to Investment Banks, who further bundled them and sold them as investments all over the world. Fannie and Freddie had sorta/kinda guaranteed them as good investments, but nobody knew which parts were good and which bad.  Because mortgages were easy to get and home prices were climbing so fast, many people saw a dandy get-rich-quick scheme and bought up quantities of houses for little down, expecting to flip them for a quick profit. Overblown bubbles collapse, and houses aren’t worth as much any more.

That put the economy in the tank. General Motors was about to collapse, they were almost out of cash. Chrysler was not in much better shape, nor was Ford. George W. Bush, at the advice of his economic experts, signed a check for TARP (Troubled Asset Relief Program) which allowed the Treasury to purchase “troubled assets,” allowing the institutions to stabilize—the institutions had to pay the money back. This was October, 2008, after Obama was elected, but before he took office.

That, of course, did not keep Obama from blaming the financial crisis on Bush. He continued to do in every speech for the next four years. You repeat anything often enough, and at least some  people will believe it. Thus freed of any responsibility for the financial crisis, but free to take full credit for “saving GM,” Obama took over the auto industry, put his own people in charge, ordered up the all-electric Volt, shafted the legally entitled bondholders, fired dealers and their workers, and gave the unions full benefits and seats on the board.

That disposed of, Obama got a huge “stimulus” bill passed by the Democrat-controlled Congress. A stimulus seldom works to rescue an economy, yet this Keynesian remedy is a favorite of the Left. The funds were wasted, and most of it went to cronies. That taken care of, Obama embarked on health care, which he turned over to Congress to put together in back rooms, and turned his attention to doing fun things like picking favored industries to support and selecting the environmentalists’ favorite kinds of energy to support.

There is no such thing as “government money” there is only taxpayer money. And when that doesn’t seem to be enough, you borrow from China. Mr. Obama has had a wonderful time spending. It’s great fun. You get to throw fancy dinners in elaborate tents on the White House lawn ($4,000+ a plate), support $100,000 Fiskars electric sports cars, reward all your bundlers from the campaign, and go around to the factories making interesting new stuff, for photo-ops. No benefit for the taxpayers whose money supported this nonsense.

And when you rack up $1,000,000,000,000 every year added to the national debt, the debt ‘unexpectedly‘ gets very large. Business is not hiring, too much uncertainty and new regulation. The debt is downgraded. The rolls of the people who have dropped out of the labor market are soaring. The numbers on food stamps now exceed the population of 24 states. Poverty is increasing.

With an economy in such a really dreadful state, Mr. Obama wants to raise taxes on “the rich”— those with incomes of $250,000 or more. But some of those same people are Americas’ small businesses. Over 900,000 businesses with more than 50 employees, whose owners file their taxes as individuals, have been soaked with rising energy costs, drastically increased regulation, and all the new costs coming January 1, from ObamaCare. Small business is not hiring, as the rolls of the unemployed attest. President Obama wants to make it worse so that he will have more revenue to “redistribute.” He believes in a big active government and what an active government does is spend money.

Republicans fear that the President is initiating a second, deeper recession, if not collapse. On November 17, Treasury Secretary Tim Geithner told Bloomberg that “we ought to just eliminate the debt ceiling.”The debt ceiling is the only thing even vaguely resembling a control on the runaway government. On November 17, the national debt was $16.28 trillion, only $113 billion short of the national credit limit. But eliminate the debt ceiling as a restraint on Presidential Spending sounds — um, unwise.

Will Congress and the President act to avert disaster and another recession? After much posturing, there will probably be a deal of some kind. Obama is determined to tax the rich, because he has talked about that for months. It’s because of “fairness.” If he succeeds in increasing taxes on the rich,  it will do essentially nothing to reduce the deficit, and do a lot of damage to the economy, but it isn’t about reducing the deficit nor about increasing revenue. It is about “fairness” so the President can say to the poor — see, I took more money away from the rich to redistribute to you—and then he’ll spend it on a some useless new green project.

That’s just what you voted for, isn’t it?



Brave New World — Redux by The Elephant's Child

This slideshow requires JavaScript.

This is an experiment. WordPress lets me make a slideshow. If it keeps cycling over and over, hit the pause button. That seems to allow you to click your way through, without starting the endless cycle. As I said, it’s an experiment.  Sad, though.



Free-Market Medicine v. ObamaCare by The Elephant's Child

We recently demonstrated how free-market medicine works with a post about the Surgery Center of Oklahoma, which is a shining example. ObamaCare, on the other hand, is the left’s attempt to gradually funnel us all into single-payer, government-run health care.

Please note that ObamaCare is not about health, nor is it about medicine. It is about insurance and who pays for what. They tell us that ObamaCare will reduce costs and promise you all sorts of free goodies. Obama partly won the election by promising free contraceptives. (Well, of course they are not free because the rest of us will have to pay for them. I should clarify that: the young women who are getting “free” contraceptives will be paying for the “free contraceptives” of all the women in the country who are using contraceptives. Probably paying more than the $9.00 a month’s supply costs at a discount pharmacy. But I guess that’s how you learn about basic economics.

ObamaCare: think of it this way — draw two stick figures with a space between. Label one ‘patient‘ and the other ‘doctor.’ Between the two stick figures, draw a small box. Label that ‘insurance companies‘. Then above the small box, draw a much bigger box. Label that one, oh, just ‘government’ to represent the over 100 agencies and offices and euphemistically named bureaus that will supervise and control the patients and the doctors, the insurance companies, the pharmacies, the suppliers, the hospitals. All those agencies have who-knows-how-many employees who all have salaries which are excessive, except by DC standards. That little exercise alone should tell you that ObamaCare is going to cost a lot more. Yet ObamaCare is all supposedly about how much it will save you. (Not really, it is really about making you dependent on liberal government, so you will always vote for liberals.)

So, while free-market medicine is about competition and creativity, innovation and plain old American free enterprise, ObamaCare is about folding you into the arms of bureaucracy, where you will forever be dependent on government, until they decide that it costs too much.  Medicine becomes not a matter of the care a doctor gives to a patient, but for the physicians, it becomes a matter of trying to get paid enough to cover costs. For hospitals and suppliers, it becomes a matter of trying to cut costs to comply with government budgets.  The British NHS provides a running example of what we will become in time. To wit:

A BID to save nearly £3billion by slashing appointments with a doctor and treating patients via computer will put lives at risk, ministers were warned.

Health Secretary Jeremy Hunt is planning a technological revolution that could spell the end of the traditional doctor’s surgery.

A new system of “virtual clinics” is being planned in which GPs connect with patients via iPads and Skype, an idea that NHS bosses are importing from India.

The reforms would save £2.9 billion “almost immediately” and improve the lives of most patients, for example by avoiding the need to find child care during appointments, Health Minister Dr Dan Poulter said last week.

However, critics are concerned the initiative would create a two-tier NHS in which the less technologically able, particularly the elderly, would be left behind….

The ideas, contained in a Health Department report called Digital First, include arming community nurses with iPads in rural areas and making more use of Skype video calling between GPs and patients. There will be more online assessments “augmented” with video calls.

Mobile phone “apps” will be used to access lab reports and health records and negative test results will be sent by text messages rather than delivered in person. Mr Hunt, who made a fortune by creating an internet company, believes that while mobile broadband technology is revolutionising most walks of life, there is a problem once ­people encounter the relatively antiquated systems of the NHS.

The Government is trying to fill a £20 billion NHS funding gap and health chiefs want to reduce “needless” appointments that clog up staff time.

Well, the NHS has kept patients parked in ambulances outside hospitals because they can have only a specified number of admissions a day, they’ve conveniently offed seniors in their final years with ‘”do not resuscitate ” notes on the charts, cut back on cleaning and linen changing and drinking water and food. The battle has become — how to cut costs, not patient care and saving lives.

The innovation and inventiveness that produce savings are eliminated by the overweening bloated weight of bureaucracy, once established, is always seeking more power and more control, and attempting to reduce the costs that they themselves created with their processes.



Ethan Uslan plays George Gershwin’s S’Wonderful by The Elephant's Child
November 25, 2012, 8:49 pm
Filed under: Entertainment, Freedom, Music | Tags: , ,

I’ve been in a blue funk all weekend. Nothing like a bit of ragtime to change the mood. What cheerful music

(h/t: Vanderleun)



Goodbye California, And All Your #*#!*#! Geraniums! by The Elephant's Child

One of the best indications of a state’s economic health is the U-Haul Index, first publicized by economist Mark Perry. It shows what people are paying to move into or out of a state. Renting a 20-foot truck one way from San Francisco to San Antonio, Texas for example, costs $1,693.  Renting the same truck with San Francisco as the destination costs only $983.

As Perry explains:

The American people and businesses are voting with their feet and their one-way truck rentals to escape California and its forced unionism, high taxes, and high unemployment rate for a better life in low-tax, business-friendly, right-to-work states like Texas.

Texas has no individual or corporate income tax, and a lower sales tax. Texas’ state and local tax burden is less than eight percent of income, well below the national average. California’s is almost twelve percent. But it isn’t just taxes. California’s regulatory environment and huge deficits are chasing companies out-of-state. California is the testing ground for President Obama’s ideas of post-economic liberalism. All Obama’s dream programs are here — cap and trade (the first sale was a disaster), massive taxes on the rich, huge investment in unwanted high speed rail, lots of wind and solar, environmental regulation has decimated the great Central Valley in the name of the Delta smelt.

The state’s efforts to redistribute the wealth from those who earned it to those who didn’t, have resulted in California, which has 12% of the country’s population but a full one-third of the nation’s welfare cases.

Since 1990, California has lost nearly 3¼ million residents, most of them moving to Texas, Nevada and Arizona. A study from the Manhattan Institute blames the exodus on “chronic economic adversity,” fiscal instability, population density (Los Angeles and Orange County have nearly 7,000 people per square mile, more than New York or Chicago), taxes, regulation, high-priced power, high labor costs, the high price of housing and commercial real  estate. And the unemployment rate at 10.9 percent is dismal. In the U-Haul Index, California has been rated dead last for the eighth consecutive year.

Each year the evidence grows that people and businesses are leaving California or avoiding locating there because of the high cost of doing business due to excessive state taxes, excessive regulations,  and an inability of state government to understand the nature of the problems they are causing.

The U-Haul index demonstrates that more and more people are willing to pay extra to get out of California.



Arab Spring, Fall Foreign Policy Blunder. by The Elephant's Child

The “Arab Spring” was much celebrated by the Obama administration and the American media as an uprising of the Arab peoples living in the dictatorships of North Africa. Hope and change, freedom and democracy were, they were sure, in the wind.

If you remember, Mohamed Bouazizi, a 26-year-old Tunisian street vendor helped to start  what has become known as the Arab Spring, by an act of desperation by a young man whose efforts to eke out a living for his family were thwarted by government officials at every turn. He set himself on fire, for all to see, in a public square.

That act sparked a mass uprising in Tunisia, that quickly spread o Egypt, Yemen, Libya and Syria. So many spontaneous uprisings, at such a rapid pace.  Bouazizi’s self-immolation epitomized may Arab’s sense of helplessness and despair. Unorganized unhappiness and calls for leaders to “leave.” But in revolutions and uprisings, the organized are often prepared to take the opportunities that present themselves. And so it has been.

In Egypt, there was an 82-year-old dictator, 29 years in power, seeking another term while scheming to hand off power to his unpopular son. It was obvious that the Islamists would run away with the elections. And so they did, and we now have a bumper crop of Islamist regimes so radical that we’ll miss Egypt’s Hosni Mubarak and Libya’s Moammar Gadhafi. These are the results of the “democracy in the Middle East” that President Obama and the left managed with one of the worst foreign policy blunders in history.

Tens of thousands of Muslims rioted in Cairo’s Tahir Square last January, and the White House and the media spoke breathlessly of Western-style freedom blooming across the Arab desert. When skeptics cautioned that the Arab world has no history of democracy and radical Islamists would probably step in, the left sneered that they were bigots.

They ignored polls showing that large majorities of Egyptians were yearning for the chance to vote in Islamic law. Two-thirds wanted to get rid of Mubarak so they could have stonings of adulterers and beheadings of apostates — in Tahir Square.

Obama urged on the rioters and pressured Mubarak to step down. The Muslim Brotherhood got 60% of the vote, Mohamed Morsi was elected President, and promptly dismissed all the Generals of the Egyptian Army.

Now he has become guarantor of the cease fire between the Israelis and Gaza in a bizarre step, and on the strength of that granted himself broad powers above any court, declaring himself the guardian of Egypt’s revolution, and used his new powers to order the retrial of Hosni Mubarak. One Dictator gone to be replaced by another.

Opponents of President Mohamed Morsi were reported to have set fire to his party’s offices in several Egyptian cities in a spasm of protest after he claimed new powers. In Alexandria there were clashes between opponents of the Muslim Brotherhood’s Freedom and Justice Party and his followers.

Mr. Morsi, a longstanding member of the terrorist Muslim Brotherhood won Western plaudits only days ago for “brokering a cease-fire” to halt eight days of lethal exchanges between Israeli defense forces and Hamas militants in the Gaza Strip.

Egypt is the most populous state in the Middle East, but poor. It cannot feed itself, but vast amounts of American aid seem to help. Their most important industry is tourism, which is not flourishing in the face of immanent uprisings at any moment.  Yet you have Islamists so radical that they want to tear down and destroy the pyramids as blasphemous, which are the nations only significant source of income. Stonings and beheadings in Tahir Square will probably not go over as tourist attractions.

I’m not sure that either Susan Rice nor John Kerry are up to the job.

 




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