American Elephants


A Lonely Advocate Fighting For the Common Good. by The Elephant's Child

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This is Philip K. Howard, who has been a practicing attorney in Manhattan for many years, and who has been thinking deeply about the law and writing about it for twenty years. His first book, The Death of Common Sense: How Law is Suffocating America, was a direct hit on the body of law and regulation that dictates impossible rules that make no sense. But he doesn’t stop there, he offers solutions.

He followed that up with The Lost Art of Drawing the Line: How Fairness Went Too Far. Politically correct law has become the enemy of freedom and of the common good. Legal anxiety trumps right and wrong. What if most of us grew up with seesaws in playgrounds and want our kids to have that experience as well.
Sorry, the legal consequences of an accident are too great. The result is playgrounds that are so excruciatingly boring that the kids aren’t interested. Demanding that we be “fair” to everyone is an impossible goal. As your mother probably used to tell you — life isn’t fair.

Life Without Lawyers: Restoring Responsibility in America: was about restoring the can-do spirit that made America great. We are losing the freedom to make sense of daily choices — teachers can’t maintain order in the classroom, managers are trained to avoid candor, schools ban tag, and companies plaster inane warnings on everything: “Remove Baby Before Folding Stroller.” Why is our economy not recovering more rapidly? Where are the entrepreneurs? Facing a body of law that destroys initiative. What is at issue is the vitality of American culture.

His newest book is The Rule of Nobody: Saving America from Dead Laws and Broken Government, just out. He says that underneath the double-dealing, the polarization, the self-serving is a broken government system that produces rising debt, failing schools, overly expensive health care and economic hardship. Rules, inflexible rules, have replaced leadership, and everyone looks to the rules to know what to do or not do. Philip Howard argues for a return to the framers’ vision of public law — setting goals and boundaries instead of dictating daily choices. This is not a situation to be easily defeated. Congress turns newly passed laws over to federal agencies to draw the lines and devise the regulations that will enhance and grow the bureaucracy and guarantee their jobs. Our hero Trey Gowdy speaks of the House’s job of making law — yet does not mention the job of reforming, eliminating, or repealing bad laws — a task seldom mentioned and even less often accomplished.

Each of these books is only about 200 pages, and invaluable. This is not dry lawyer talk, but real, living examples of how Law has taken over our lives, sapped our creativity, destroyed our freedom. No one is free to make choices, including government officials. An important reason why it is so difficult and expensive to start a business, and why innovation has slowed to a crawl.

Highly recommended. Great reads. And essential to understanding just what has gone wrong in our government and how we can fight back. Nobody said it was easy.



Have You Noticed the Price of Bacon and Butter Lately? by The Elephant's Child

Is there any straight talk anymore? The economy created 248,000 new jobs, slightly above the recent average of about 228,000, so the unemployment rate fell two tenths of a percent to 5.9 percent. Obama is crowing, because the unemployment rate is going down, but it is going down because 329,000 people dropped out of the labor force. There are 7.1 million people working part-time who would prefer to be working full time. How many of the people with part-time jobs hold two of the jobs?

President Obama went out to Northwestern University on Thursday to remind young voters of all the economic success he has had. The headline numbers may indicate health, but the economy simply isn’t that healthy. George Will, on last night’s Special Report with Bret Baier, was not exactly impressed.

The president went to the state of Illinois to brag about the economy. Illinois has 300,000 fewer jobs than it had in 2008. For the last four years in the state of Illinois, the number of new food stamp recipients has increased twice as fast as the number of new job recipients. He was speaking in Illinois on a college campus. He did not mention that 40 percent of recent college graduates are either unemployed or underemployed — that is, in jobs that don’t require college degrees — and one in three recent college graduates is living at home with their parents.

The jobs report is a snapshot, and provides several different ways of looking at the economy, so you can pull out the numbers that best make your case. Fewer people are participating in the labor force, and the rate remains at levels last seen in 1978. The share of the population employed is only 59 percent. Is the labor force now permanently smaller because of demographic changes and the shock of a slow growth recovery,  or can those long-term unemployed be lured back when the economy shifts into a higher growth gear that pays enough to make work more attractive than early retirement or government benefits? Real median net worth has declined from its peak in 2006 back to less than it was in 1989.

Better economic policies might be possible after the November election. Republicans have a chance to retake the Senate, which would end Majority Leader Harry Reid’s stranglehold on pro-growth measures that have passed the house only to be tabled in the Senate.

There’s regulatory relief, tax reforms like the repeal of the foolish medical devices tax, approval of the Keystone XL pipeline, and many more. President Obama wouldn’t sign them all, but he couldn’t afford to veto everything without paying a heavy political price by proving that he has been the cause of the gridlock he deplores.

We have to keep reminding people that the recession (‘the worst since the Great Depression”) technically ended over five years ago, in June of 2009. Over 58 percent of the people think that we’re still in recession. Some Recovery!



Overregulation Costs Manufacturers Over $2 Trillion a Year! by The Elephant's Child

American business has been telling the federal government regularly that they are overdoing the regulation, and it is damaging the economy. The federal government yawns and says uh huh. Obama’s attitude seems to be that is what business does — complain about regulation — pay no attention to them — it isn’t important.

Now the National Association of Manufacturers has stated firmly that manufacturers are the backbone of our nation’s economy and employ more than 12 million men and women who make things in this country. To maintain manufacturing momentum and encourage hiring, the United States needs government policies more in tune with the realities of global competition.  Our regulatory system produces unnecessarily costly rules, duplicative mandates, impediments to innovation and barriers to our international competitiveness.

That’s straightforward talk from Jay Timmons, president and CEO of the National Association of Manufacturers. So they put their money where their mouth is, and produced a new report that shows the macroeconomic impact of federal regulations.

The burden of regulation falls most heavily on small manufacturers who employ less than 50 employees— at $34,671 per employee, per year. The burden on medium size manufacturers who employ 50 to 99 employees — $18,243 per employee per year, and  for large manufacturers who employ more than 100—the cost per employee is $13,750 per employee per year. The total cost of federal regulations in 2012 was $2.028 trillion (in 2014 dollars). The annual cost burden for an average U.S. firm is $233,182 or 21 percent of the average payroll. Eighty-eight percent of those surveyed said that federal regulations are a top challenge for their firm.

Everybody has talked about “the worst recovery since World War II,” but the White House seems to have no understanding at all of why it is so slow. They have kept pumping money into the economy, giving out more benefits, and that money is supposed to circulate and multiply as it passes from hand to hand. Nancy Pelosi was quite certain that unemployment benefits paved the way to recovery all by themselves.

Democrats don’t much like manufacturing or businesses who expect to earn profits from their activity. They have always regarded profit as a bit of a dirty word, money only earned by greed. Because business is greedy, it needs a firm hand and careful regulation. That’s why they have such a hard time trying to figure out how to create more jobs (infrastructure!) and jump-starting a growing economy.

Well, it matters what kind of business it is. If it is building wind farms and making solar panels, it is good. If it’s making guitars that are hugely popular with rock stars, you had better not be using any endangered wood for the frets. Your stock will be confiscated by the SWAT team that will arrive to shut down your business. (Enter Gibson Guitars in the search function just above Bob Hope’s head in the sidebar).

The business of regulation is handed off by Congress to various agencies, and the agencies’ underlying business is to assure their own continuing employment at high government salaries — so they are careful and thorough in devising regulation and oversight of the regulation, and continued monitoring of each business involved.

That in turn means forms and paperwork and legal requirements, which means that each business has to hire an extra bunch of people to comply with the paperwork requirements. The biggest cost of regulation is the full-time equivalents hired to do the paperwork. And it is serious business. Most of the agencies now have their own SWAT teams to burst into your business and make sure that you are really complying. So it really isn’t funny when the first lady decides that restaurants should show the calorie counts of each ingredient on their establishment’s signage and menus in the interest of reducing obesity.

That’s just the regulation. The tax system for American business has increased the burden to such an extent that we have moved down to 32nd in the ranking of heaviest burden on business and loss of competitiveness.  Obama thinks he is taxing rich CEOs and greedy businesses, but it is the workers who bear the burden of high taxes. We are chasing capitol out of the country to go where it is more welcome and will be better treated. Democrats call this “tax inversion” and are trying to devise laws to keep companies from moving. (Economic Patriotism!) They could just lower the taxes, which would bring in more income)

Economies don’t grow because of nice nonprofit organizations that care about people. They grow because of hardworking businesses who turn a profit and are able to hire and grow and expand.  It’s called Capitalism, which has made America the most prosperous and innovative country in the world. Prosperity is created by free markets and free people, not by the heavy hand of government.



Treasury Will Pull Out All The Stops to Enforce Economic Patriotism! by The Elephant's Child

The Treasury Department could act as early as next week to stop companies from moving their headquarters out of the United States for tax purposes. “Economic Patriotism.” Where is these companies’ economic patriotism? Representative Sander Levin, ranking Democrat on the House Ways and Means Committee, which has jurisdiction over tax issues warned that “They’re preparing to act and they’ll act as soon they are ready.”

Treasury Secretary Jack Lew told Levin on Wednesday that he would not necessarily wait for Congress to go home before he would take unilateral action.  Wonder where he learned that trick?

With his brother Senator Carl Levin, (D-MI) Sander Levin has written legislation to” tighten the rules restricting so-called tax inversions, which are tax maneuvers in which U.S. businesses buy a company in a low-tax country to move their headquarters there.”

It’s the Burger King deal with Tim Horton’s Coffee Shops, and the move of their corporate headquarters to Canada, where total tax costs will be 46.4 percent lower, that has driven Democrats to start writing more confiscatory laws immediately. Burger King will continue to pay taxes on business done in the United States.

The Obama administration and Congressional Democrats have raised the alarm over possible consequences to the U.S. tax base.  Republicans  have been suggesting for some time that they should lower or eliminate the corporate tax, because the U.S. corporate tax is not only the highest in the industrial world, but the U.S. also taxes income earned abroad —which no other country does.

There is a long history going back to Martin Van Buren, of administrations that helped an economy to recover from a recession by cutting taxes. Cutting taxes allows companies more confidence in the future, and they are more apt to grow, expand, and hire — creating a better business climate— which in turn grows the economy.  Canada’s corporate tax was 43 percent in 2000, and is 26 percent today, and their economy is booming.

Democrats are fundamentally unable to grasp the idea that cutting taxes could  produce more income and make the economy grow. It simply does not compute. Treasury Secretary Jack Lew trained as a lawyer, but has simply moved through the corridors of government as a bureaucrat in one office or another. He got all huffy about the Burger King move, in a video at Bloomberg, mentioning all the advantages the U.S. provides —roads and bridges (you didn’t build that) and infrastructure!

So far as I can tell only 9 companies have actually done a tax inversion. A number have started to and backed out after being threatened.

Speaker John Boehner and Senate Finance Committee ranking member Orrin Hatch have warned that any Treasury measure that would be effective would likely lie beyond Lew’s authority.



Democrat Attempt to End Freedom of Speech Failed. by The Elephant's Child

The Democrats attempt to rewrite the Constitution and amend the First Amendment to curtail the rights of Americans to free political speech has died in the Senate. It needed 60 votes to advance. Free political speech is the very essence of liberty, and the envy of the world.

Fifty-four Senate Democrats actually voted to give Congress the power to “regulate and set reasonable limits on the raising and spending of money by candidates and others to influence elections.” Think through what that would mean.

Some, such as Senator Bernie Sanders (S-VT) said the amendment would allow Democrats to enact more of their preferred legislation. Exactly. Democrats want to be completely in charge, without any interference from those pesky Republicans. They just want Republicans gone — so they can rule.

This bunch rejects 223 years of liberty and political freedom guaranteed by the Bill of Rights since it was ratified in 1791 — because they want their own way. No arguments. No questioning our policies. No criticism. No unpleasant speech. Can they win elections without cheating?

Somebody remarked that there used to be a “Sandinista wing” of the Democrat Party. Not anymore, it’s entirely Sandinista now.



The Difference Between Republicans and Democrats Spelled Out Clearly! by The Elephant's Child

Treasury-Secretary-Jack-Lew-seeks-rational-budget-approach

Here’s the difference between Democrats and Republicans —clear and simple.

President Obama has nattered on about “Economic Patriotism” and what they call “Corporate Tax Inversion.” Some corporations are finding it to their advantage to locate their headquarters in a country with significantly lower taxes. Medtronic is acquiring the Irish company Coviden and moving its corporate headquarters to Ireland.

The problem is American corporate taxes — which are the highest, at 35 percent, among the advanced economies in the world. Not only that, but the U.S. also taxes the income that American corporations earn overseas — something no other country does.

Democrats are up in arms. How dare they pick up and move? It’s not even patriotic to not pay taxes in your own country. Democrats intend to make “Economic Patriotism” a major issue in the fall campaign. (Good Democrats all hate big business).

Treasury Secretary Jack Lew, who should know better, has advocated “anti-inversion legislation.” Democrats are afraid that if a few companies do this it will open the floodgates and all sorts of American companies will locate abroad. Corporations who operate in the United States would still pay taxes on all the income earned in the U.S. but they won’t be paying double taxes to a foreign country and to the U.S. That gets very expensive, very fast.

There is, of course a very simple solution. You cut the corporate tax rate back to a rate more in line with other nations — or, gasp, even below. Yes, this is a Republican thing. Republicans like to cut taxes. The result would be a burst of activity from business, hiring, expanding, growing. The economy might even actually recover. It is how we have recovered so quickly from past recessions when Republicans are in charge.

Burger King has purchased Canada’s Tim Horton chain of coffee and donut shops, and plans to move their headquarters to Canada, where tax costs will be 46.4% lower. Canada has lowered their corporate tax rate from 43 percent in 2000 to 26 percent today. How much tax revenue did Canada lose by the dramatic reduction in their corporate tax rate? None. The lower tax rate raises more money.

For Democrats, this simply does not compute.

Secretary Lew said the corporate tax moves would mean that “all other taxpayers —including small businesses and hardworking Americans—will have to shoulder more of the responsibility of maintaining core public functions that everyone, particularly U.S. businesses, depends on.” Sigh. This man is the Secretary of the Treasury!

Lew’s remarks, delivered at an event hosted by the Tax Policy Center in Washington, came the same day Bloomberg News reported that Sen. Charles Schumer (D-NY) will soon introduce a bill that would slash the amount of interest an inverted firm can deduct from its U.S. income from 50 percent to 25 percent.
That will fix everything. Cut their deductions. Maybe they will lay off a few more people, and Obama’s recession will go on and on and on.


Haven’t Heard Much About August Jobs? Bad Report. Hushed Up! by The Elephant's Child

Didn’t we just hear Obama making a speech in which he extolled how well the economy is doing — that was in Minneapolis at the “laborfest,” in which he celebrated his “middle-out economics.” Over the past 53 months, he said, our businesses have created nearly 10 million new jobs, and in the last six months we have created  more than 200,000 jobs each month.

But in August there were only 142,000 jobs, for the first time since January. Participation in the labor market was 62.8 percent, the worst since the 1970s.

Those who have been unemployed for more than 27 weeks is high at 2.963,00031.2 percent of all unemployed. Those who are working part-time when they would prefer to be working full time dropped a  little to 7,277,000. If you add the under-employed to the unemployed, the broader unemployment rate is 12 percent.

This is a slow, sluggish recovery because of government action. Recessions are nothing unusual. There is a business cycle. When the signs turn positive businesses start to grow and expand and hire. The more things improve and the more they start making money, some enthusiasm is going to go too far. Over-expansion, a little greed, too much enthusiasm, and first thing you know there are some bankruptcies, and people get laid off, expansion plans are put on hold and a lot of marginal businesses go out of business.

We have a long record of recessions and recoveries and how they happen. Swift, short recessions happened because the administration clamped down hard on spending, cut the budget, cut taxes (especially on business) and eliminated unnecessary regulation.

The Obama administration believed that more money circulating in the economy (Keynesian economics) would somehow boost the economy just by moving around. (magical thinking, doesn’t work).

They believed the extra money circulating from government food stamps would somehow boost the economy, neglecting to notice that money came from the pockets of taxpayers. Obama invested enormous amounts of taxpayer money in solar energy and wind turbines, which observation of Spain’s disastrous history with renewable energy  should have dissuaded him. And of course business had to be controlled more. Americans were getting fat, and Michelle had just the remedies — more regulation. The auto companies couldn’t be allowed to go through a normal bankruptcy, but required a special government effort.

The Keystone pipeline would have created 20,000 jobs right off the bat in pipeline building with thousands of spin-off jobs in servicing the project. The Greens objected, end of project.

But perhaps the most notable example of government stupidity was the Great Gibson Guitar Raid. On the vague possibility that the tiny bits of ebony or rosewood used for guitar frets might have been imported without proper papers, Gibson was raided with an armed Swat Team, business shut down, raw materials and finished guitars confiscated. Huge losses from inability to conduct business. Gibson had the necessary permissions from all the countries involved, but the feds weren’t about to be embarrassed. Do you think that businesses pondering whether to expand a little didn’t notice that?  Or the Sacketts who were irrationally accused by the EPA of attempting to build a house on a “wetland” on an ordinary subdivision overlooking a lake? That’s regulation gone bat-excrement. Business put their plans on hold, waiting for a better business climate.

The left does not understand cutting taxes. They do not understand cutting regulation, because business must be controlled, or who knows what would happen? We have fairly large numbers of members of Congress who have never done anything else but government. Who believe firmly that good people do government and make nice benefits for the people, which will make the members of Congress feel good. Only bad people who are greedy work for private business, and they must be controlled. That’s where we are, and why.

As you have noticed, he’s not doing too well with foreign policy either.




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