American Elephants


Job Creation 101. Some Prior Business Experience Required. by The Elephant's Child
February 13, 2010, 11:50 pm
Filed under: Capitalism, Democrat Corruption, Economy, Politics, Taxes | Tags: , , ,

If you wanted to know why the Obama administration seems to be at such a loss as to a way to create jobs, this little graph explains.  Nobody much in this administration has ever worked in the private sector.  No familiarity with the workings of the free market.  Capitalism, — well, you know what Academe has to say about that.

Here’s  economist Veronique de Rugy, at Big Government, yesterday:

The definition of insanity is to keep doing the same thing over and over again and expect different outcomes.  The different versions of the jobs bills circulating in Washington DC these days are perfect example of that point.

See for instance, the  jobs tax credit for hiring new workers idea. What a brilliant example of bipartisan nonsense that is. Pushed by President Obama during his State of the Union address earlier this month and most recently picked up by Senators Schumer and Hatch.

Still no one seems to wonder, why would employers pay a new worker $40,000 to earn a $5,000 credit unless that worker generates at least $35,000 of revenue? Even when the advice comes from economists at the National Federation of Independent Businesses, the largest association of small business owners in the country, it is ignored by the President and Congress.

Think about it this way:

If your business is slow, and your customers are not buying your goods and services, it is likely that your tax liability will be significantly reduced or nonexistent even.  No tax liability, no need for a tax credit. Better yet, no customers, no need for employees, tax credit or not. (Duh)

Of course the same can be said about Obama’s proposal to use $30 billion of the repaid TARP money to prop up small business lending. There will be no demand for loans as long as the economy is doing poorly and customers are not buying goods and services produced by small businesses.

If Obama wants to help small businesses he should stop pretending to give with one hand while stealing big time from the other hand. What do I mean? Well, he gives useless tax credits on the one hand but is proposing big tax increases for those earning more than $250,000 a year on the other, including all the small business owners that report their business income as individual income. These guys aren’t going to take loans and invest in their businesses and hire new employees if they are going to be hammered with tax the following year.

The Stimulus Bill was not about “stimulating the economy,” nor about spurring economic recovery.  It was about funding favored Liberal policies.  Stimulus II is not called a “stimulus” because the first stimulus notably failed to stimulate and people have noticed. It is instead called  “A Jobs Bill,”  but it also is not about spurring economic recovery. If Congress includes the tax hikes included in the budget into law, countless more jobs will be lost.

President Obama has said that his number one goal for 2010 is to create jobs.  He’s not only not particularly interested, he’s uninterested in learning how it’s done.



After the Election is Over, You Have to Perform. by The Elephant's Child
February 13, 2010, 4:26 pm
Filed under: Capitalism, Education, Taxes | Tags: , , ,

If you live in a low performance state, you probably know it. Unemployment is high, so the legislature is raising taxes.  Companies are moving out-of-state to locations friendlier to business.  Wealthy households are moving out, and fewer wealthy households are moving in.

In Virginia, Republican Bob McDonnell won a high-profile gubernatorial race. He has unveiled an ambitious proposal to expand the number of charter schools.  He also wants to create virtual schools in which students can learn outside of traditional classrooms, as well as laboratory schools that would benefit from partnerships with Virginia colleges and universities.  All three proposals must be approved by the General Assembly in a session that ends next month.

He is sticking to his no-tax pledge, and he is pushing ahead with an effort to sell off  state-owned liquor stores.  States which have privatized their liquor sales have gained million of dollars in new tax and license revenues, and cut millions of dollars in government expenditures.  In other words, he’s doing what he said he would.

In New Jersey, newly elected Republican Governor Chris Christie is also doing just what he promised.  He has appointed a school-choice advocate to the howls of the teacher’s union. And he has announced a real spending freeze on $1.6 billion of unspent money.  He was blunt. “Today we come to terms with the fact that we cannot spend money on everything we want.  Today, the days of Alice in Wonderland budgeting in Trenton end.”

A new study by Boston College’s Center on Wealth and Philanthropy looked at the decade from 1999 to 2008.  It found that in the decade’s first half, New Jersey was booming with a $98 billion net influx of capital due to wealthy households moving into the state.

Then the trend reversed.  From 2004 to 2008 there was “a large decline in the number of wealthy households entering New Jersey” as well as “a moderate increase in the outflow of wealthy households leaving.”  How come?  The study doesn’t say, but the top income tax rate went from 6.37% on incomes over $500,000 to 8.97% — a 40% increase.

Basic economics:  when you tax something you get less of it — in this case wealthy  households that help to create jobs and increase charitable capacity. The out-migration went to New York and Pennsylvania which have lower top tax rates. The third most popular destination was Florida which has no income tax and no estate tax.



An Elaborate Scheme to Counter the Tea Party Movement. by The Elephant's Child

Tea Parties, as I understand it, grew out of unsatisfying Town Hall meetings, and representatives who wouldn’t listen.  People who had never demonstrated before, nor carried a sign joined with others who were similarly disturbed at excessive spending, and irresponsible congressmen.

Demonstrations began popping up all over the country, interest spread all over the internet. The Obama administration claimed to be unaware of the hundreds of thousands of people marching on the mall, and cleaning up after themselves like the nice responsible people they were.

Leftists have sneered and criticized, and recently anti-tea party groups have popped up in opposition. Joseph Abrams of Fox News has conducted a detailed investigation of the independent grassroots groups which have turned out to be part of “a complex network of money flowing from the mountainous coffers of the country’s biggest labor unions and trickling slowly into political slush funds for Democrat activists.”

The biggest benefactor is AFSCME the American Federation of State, County and Municipal Employees, which donated $10 million to two front groups. Other unions are SEIU, Change to Win, Communications Workers of America, NEA, Teamsters, United Food & Commercial Workers and others.

Here’s how it works: What appears like a local groundswell is in fact the creation of two men — Craig Varoga and George Rakis, Democratic Party strategists who have set up a number of so-called 527 groups, the non-profit election organizations that hammer on contentious issues (think Swift Boats, for example).

Varoga and Rakis keep a central mailing address in Washington, pulling in soft money contributions from unions and other well-padded sources to engage in what amounts to a legal laundering system. The money — tens of millions of dollars — gets circulated around to different states by the 527s, which pay for TV ads, Internet campaigns and lobbyist salaries, all while keeping the hands of the unions clean — for the most part.

“One of the groups created a web site,” says Daniel Foster, “TheTeaParty Is Over.org, dedicated to stopping tea partiers; attempts to, in its words “undermine…the legitimacy of the federal government in favor of a radical rightwing form of state’s rights,” and “Prevent their dangerous ideas from gaining a legislative foothold.”

Goodness, can’t have people out there with such radical ideas as cutting back on spending, or balancing the  budget, or banning earmarks. That’s downright dangerous!  What will those crazy radicals think of next?




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