American Elephants

Essays to Light Up Your Brain. by The Elephant's Child
September 5, 2010, 9:50 pm
Filed under: Freedom, Iraq, Islam | Tags: , ,

If you have a little extra time this weekend, spend a bit of it with David Warren, columnist for The Ottawa Citizen. A rare voice of sanity in the world of modern media.  I like his mind.  Always rewarding.

“No One Home” takes up the problem of Islamism, spurred by the arrest of semi-home-grown bomb plotters in Ottawa.  Warren always has deeper questions on his mind than the obvious ones.

Goodbye Iraq” begins with the end of American combat operations and the troops leaving for home.   But it only begins there, and as a cautionary tale, it covers a lot of territory before ending  up with the rule of law.

Work is not Rabbit” begins with a quote from Czechoslovakia, and winds up with a philosophical discussion of work.

If you enjoy his work as much as I do, subscribe to his mailing list, or add him to your bookmarks.  You’ll be glad you did!


It’s Election Season, Time for Class Warfare! by The Elephant's Child

President Barack Obama has called for the permanent extension of the Bush tax cuts for singles with incomes below $200,000 and married couples with incomes below $250,000, but has proposed that most of the tax cuts for households with higher incomes be allowed to expire.

This is part of Obama’s attempt to spread the wealth around.  Vice President Joe Biden rejected the Republican claim that the hikes would harm small business.  He said that John Boehner has “created this myth that a tax cut for millionaires is actually a tax cut for small business.  There aren’t 3 percent of small businesses in America that would qualify for that tax cut.”  Nancy Pelosi reversed the numbers, and said that the planned tax increases would exempt “98 percent of American families and about 97 percent of small businesses.”

This is sheer economic propaganda.  According to IRS data, fully 48 percent of the net income of sole proprietorships, partnerships, and S corporations went to households with incomes above $200.000 in 2007.  These more successful firms owned by individuals in the top income-tax bracket are disproportionately responsible for investment and for job creation.

Millions of people in the lower tax brackets have small amounts of business income.  If someone makes a little money selling on e-Bay and reports that on Schedule C, they are counted as a small business.  This is irrelevant for the assessment of the economic impact of the tax hikes.  There are many free-lancers and individuals doing business that will never reach $200.000 in a single year, and will never create a job for someone else.  Many mom-and-pop stores do fine, but will never hire more people.

If your mindset focuses on hating “the rich” and how unfair it is that someone should get a bigger piece of the (nonexistent) pie, it is hard to think rationally about who creates the jobs and how and why.  Will simply increasing taxes on some actually cause a significant reduction in business activity?  Economists Kevin Hassett and Alan Viard point out:

Economic research supports a large impact. A pair of papers by economists Robert Carroll, Douglas Holtz-Eakin, Harvey Rosen and Mark Rider that were published in 1998 and 2000 by the National Bureau of Economic Research analyzed tax return data and uncovered high responsiveness of sole proprietors’ business activity to tax rates. Their estimates imply that increasing the top rate to 40.8% from 35% (an official rate of 39.6% plus another 1.2 percentage points from the restoration of a stealth provision that phases out deductions), as in Mr. Obama’s plan, would reduce gross receipts by more than 7% for sole proprietors subject to the higher rate.

These results imply a similar effect on proprietors’ investment expenditures. A paper published by R. Glenn Hubbard of Columbia University and William M. Gentry of Williams College in the American Economic Review in 2000 also found that increasing progressivity of the tax code discourages entrepreneurs from starting new businesses.

According to the ADP National Employment Report for July, Good-producing small businesses have reduced their payrolls by 117,000 jobs since January, and they are still posting declines.

The administration claims that they need the money, but the revenue loss from extending the tax cuts for the middle class doesn’t matter.  But as far as that goes, the administration’s professed concern about the deficit hasn’t driven them to cut back on federal spending — since they still want to spend more.

There is no pie.  If “the rich” get a little richer,  the amount of money in the economy increases.  They don’t take a chunk of the available money away from “the poor.”  The poor don’t get poorer.  The great wonder of the American economy and the American Way of Life is the mobility of the American people.

Unemployed Americans need jobs.  Let’s try to eliminate roadblocks rather than add more.

The Wonders of Socialism. by The Elephant's Child

Venezuelan President-for-Life Hugo Chávez has introduced “the Good Life Card, which he claims is an instrument to make shopping for groceries easier.   Some Venezuelans are suspicious.  They see it as a rationing card similar to the one used in Cuba.

Roberto León Parilli, president of the National Association of Users and Consumers told El Nuevo Herald, “It would use more advanced technological means [than those used in Cuba] but when they tell you where to buy and what the limits of what you can buy are, they are conditioning your purchases.”

Chávez said on Tuesday that the card could be used to buy groceries at the government chain of markets and supplies.  “I have called it a Good Life Card so far,” Chávez said . “It’s a card for you to purchase what you are going to take and they keep deducting.  It’s to buy what you need, not to promote communism, but to buy just what you need.”

Venezuela has had recurring problems with shortages of supplies.  The card appeared when things began to become scarce.  Although the cards were introduced as a mechanism to deal with scarcities, they could easily become  an instrument of control.  Nothing gives a government more power than having people depend on you to get your food quota.

Chavez is an adherent of Bolivarianism, ideas drawn from Simón Bolivar.  He was long acquainted with Latin American socialist traditions.  From a young age he has been influenced by the Cuban revolutionary doctrines of Fidel Castro and Che Guevara, and the writings of Noam Chomsky.

He became president in 1999, and has gradually increased control over the country, and as usual in communist countries, Venezuela has continued to slowly fall apart.  The government got control of the national oil company in 2003.  A 2010 OAS report found concerns with freedom of expression, human rights abuses, authoritarianism, press freedom, threats to democracy and erosion of separation of powers, the economic infrastructure and the ability of the president to appoint judges to federal courts.  OAS observers were denied access to Venezuela.  Chávez rejected the report because its authors didn’t visit Venezuela.

HHS Secretary Sebelius: “We have a lot of reeducation to do.” by The Elephant's Child

Rasmussen Reports finds that 58 percent of Likely Voters favor repeal of the new national health care law, while 36 percent are opposed.  These figures include 46 percent who Strongly Favor repeal and 28 percent who are Strongly Opposed.   A majority has favored repeal of the legislation in every single week since ObamaCare became law.  Support for repeal has ranged from a low of 52 percent to a high of 63 percent.

A  Kaiser Family Foundation survey shows that only 39 percent of Americans believe that the country will be “better off” under the health care reforms.

Secretary of Health and Human Services Kathleen Sebelius said that the sustained opposition to the Democrats’  health care reform efforts has mainly been a function of “misinformation.”

“Unfortunately there still is a great deal of  confusion about what is in [the reform law] and what isn’t,” Sebelius said.  “We have a lot of reeducation to do.”

Eeeewh! Bad choice of words.  Suggests camps and ‘heavy’ pressure from the government. Sebelius argues the reforms ‘strengthen’ Medicare, extending its solvency by 12 years through 2029.

“My view is actually supported by independent actuaries, by economists and by the Congressional Budget Office,” Sebelius said.  Well, no it’s not.  In contrast to White House claims, ObamaCare is a major budget buster.  Among the worst is a simple math gimmick — trying to spend the same money twice.  They double-count cuts in Medicare’s reimbursement rates for hospitals and other providers of care — cuts so deep that they would push Medicare’s rates below those paid by Medicaid by the end of the decade.  Not realistic. Then try to use the same money elsewhere.

They cannot also be used to pay for a new entitlement and improve Medicare’s solvency.  Medicare’s chief actuary has warned that they would seriously reduce access to care for seniors by driving hospitals and physician out of the program. The left is panicked at their election prospects.   Their newest claim is that repealing ObamaCare would bust the budget.  But that claim won’t fly either.

If Congress moves ahead with repeal, there would be at least $4.5 trillion in federal spending over the next 20 years that could be avoided.  Enough to gut the tax hikes and spending “offsets”  while still paying for a sensible reform of health care that actually cuts costs and covers more people.

There are always unintended consequences with any law. With ObamaCare, we have a law that was not read even by its author — Senator Max Baucus (D-MT), was drummed up in Congressional back rooms, supported with bribes and political pressure — a law that had even Nancy Pelosi exclaiming: “We’ll have to pass the law to find out what’s in it.” That seems like a joke, and the video has gone viral but it is really a serious commentary on just how the Democrats have slammed together this bill.

Democracy cannot thrive without a certain diet of truth.  It cannot survive if the degree of truth in current circulation falls below a minimal level. A  democratic regime, founded on the free determination of important choices made by a majority , condemns itself to death if most of the citizens who have to choose between various options make their decisions in ignorance of reality,
blinded by passions or misled by fleeting impressions.

(Jean Francois Revel: The Flight From Truth)

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