American Elephants


Washington State Turned Out to Vote on Saturday. by The Elephant's Child

Today is Super Tuesday for Republicans.  A large number of states are either voting in primaries or caucusing.  Results to be seen. Here in Washington state, we had our Republican caucuses on Saturday. The media has been emphasizing the lack of interest, disappointment in candidates, way too many debates (most of  us would agree), and general boredom among Republicans and Conservatives.

Washington is a funny state. You have the left coast which contains the large cities and dominates the state. The (very left) coast is divided  from the rest of the state by a range of significant mountains including an assortment of (currently) dormant volcanoes, but many will remember the eruption of Mt. St. Helens in 1980. The left coast has long been home to loggers, fishermen and Utopian experiments which have an unrivaled record of failure. The left  simply does not understand human nature.

Over the mountains is a different country, a vast plain which was once home to the Yakima, Spokane, Shoshone, Palouse, Kootenai, Cayuse, Flathead and Walla Walla, and bisected by the great Columbia River, and is now home to their reservations, wheat fields, wine country, apple orchards and a Columbia river tamed with hydroelectric dams. Not so Left.

On Saturday the disinterested Republicans turned out for the caucuses. Four years ago, 12,000 people turned out. Saturday, there were 51,000, a 400% increase. What everyone saw was interest and enthusiasm. So much for the media.



Everybody’s Slashing Corporate Taxes —Except Us! by The Elephant's Child

Many people find the idea of a corporation confusing. The “Occupy” people couldn’t quite make up their minds whether they were most against “Wall Street” or against “Corporations” or if the two were synonymous, or which one had the most evil influence on government. Apparently they don’t teach simple definitions in college these days.

A corporation is a body of persons granted a charter, legally recognizing them as a separate entity  having its own rights, privileges and liabilities distinct from those of its members. Its purpose is to make money for the shareholders. Corporations do not exist to do good works, nor to provide jobs. They may do the former, and when they do the latter, it is a cost to them. When a corporation hires a person to do a job, it is in the expectation that the new hire will, after his salary, benefits, needs and future costs are deducted, will be productive enough to make money for the corporation. Productive people and productive corporations prosper.

That seems fairly simple.  Some few corporations manage to get special benefits for themselves from government, more get special regulation and interference in their business that makes their operations more difficult. Some corporations succeed, some fail, some are highly ethical and some are lemons. Sort of like human nature.  There is no reason to believe that corporations are especially evil.

The financial situation of the world is — not so good. Consequently all countries are taking a hard look at their finances, their debts, their obligations and their revenue.

Unbeknownst to most Americans, corporate taxation outside the United States has, for more than two decades, undergone a revolution.  As the Tax Foundation wrote last summer:

Our major trading partners have been moving toward a fundamentally different model of taxing business income. The basic tenets of this new model are lower tax rates and the exemption of foreign earnings. In the past four years alone, 75 countries have cut their corporate tax rates to make themselves more competitive.

Japan is scheduled to cut its corporate income tax rate on April 1, which will leave the U.S. with the highest corporate tax rate among industrialized countries.

Why, when every country is needing revenue, are so many countries abandoning worldwide taxation and slashing their corporate income tax rates? Two reports from the OECD which examined the impact of tax structure on economic growth concluded that “Corporate taxes are found to be the most harmful for growth.”

Corporations don’t really pay taxes. Taxes become a cost, which boosts the price of whatever goods they produce or service they perform.  Eliminating the corporate tax would be a good thing, but that’s not going to happen any time soon. Our leading presidential candidates all favor lowering the corporate tax. Obama acknowledges some of the problems, but comes up with proposals that would only worsen the disadvantage faced by U.S. businesses.

Some of the problems are a lack of  simplicity and transparency, no permanency nor predictability — businesses don’t know what to expect next.  The best tax systems have the least impact on economic decision-making.

The good news is that there is now a consensus among candidates that our corporate income tax system is harming U.S. competitiveness, economic growth and job creation.

See what your own candidates for Congress have to say. It would be very helpful to have a government that favored good policy on American business instead of just political posturing.  Businesses keep telling us why they are reluctant to hire. It’s because they don’t know what to expect and they are drowning in regulation.  Maybe we should pay attention.



Is Bigger Better? Bigger Bureaucracy? Bigger Debt? by The Elephant's Child

President Obama announced today plans to borrow some more millions from China to create — another new federal bureaucracy.  It’s hard to get a handle on the number of bureaucracies created. The infamous ObamaCare flow chart showed over 100 new bureaucracies just in health care, but many other departments have ballooned.

The new one this time is the International Trade Enforcement Center (ITEC). (They apparently get their acronym at birth). It is scheduled to have as many as 60 employees, a budget of $26 million — about $433,000 per employee — which Heritage points out may be bloated even by government standards.  The current US. Trade Representative’s Office (USTR) currently spends about $207,000 per employee.

Congressman Kevin Brady (R-TX) the chairman of the Trade Sub-Committee of the House Committee on Ways and Means issued the following statement when he learned of Obama’s request for vast new powers from Congress so that he may restructure the federal government, beginning with a merger of certain trade-related agencies. Brady says USTR has a long-standing reputation as one of the smallest yet most productive agencies in the federal government.

I’m all for streamlining agencies, but simply burying the nation’s key trade negotiators within a mountain of new bureaucracy will only damage their effectiveness and delay efforts to open new markets for American businesses and agriculture. Whatever the true agenda is, I will vigorously oppose any effort by the White House to diminish the role and resources of the U.S. Trade Representative’s office.

USTR is nimble, aggressive and operates on a tiny budget – yet participates in round-the-clock negotiations with trading partners throughout the world while producing job creating trade agreements to spur the American economy. Heaping who knows how many more layers of Washington bureaucracy upon them will neither save money nor help our struggling economy.

The federal government excels at duplication and redundancy, and consequently already has several other agencies devoted to foreign trade practices, including USTR and the Dept. of Commerce’s Market Access and Compliance and Import Administration divisions. The new staff is likely to be drawn from these agencies, the very people Obama thinks haven’t been doing enough. President Obama told the UAW :

I’m creating a trade enforcement unit that will bring the full resources of the federal government to bear to investigate and counter unfair trade practices around the world, including by countries like China.

Has China changed its trade practice? Are they getting stuffy about lending money? Why do we suddenly need to change the successful work of an effective agency? What has changed in 2012?  Oh, Mitt Romney has spoken out forcefully and negatively on China’s trade practice. Google lists 189,000 results on a search for Romney speech on China trade practice.  Some are undoubtedly repeats, but that could have something to do with it. Do you suppose that Obama held one of his very rare press conferences this morning just because it was Super Tuesday?



Tommy Emmanuel: “Halfway Home” Live 2010 by The Elephant's Child

Tommy Emmanuel performs “Halfway Home”, live at the Australian Institute of Music as part of his amazing master class in December of 2010.



The Winds of Change by The Elephant's Child

Matt Ridley, author of many books, especially The Rational Optimist,in a new article in The Spectator, points out that the British government has finally seen through the wind-farm scam, but getting rid of it is something else. Now he is confronted with a personal problem. A family trust has signed a deal to receive £8,500 from a wind company, which is building a turbine on land that once belonged to his grandfather. He is not a beneficiary. But he finds the idea that any part of his family is receiving ‘wind-gelt’ so abhorrent that he has decided to act.

He is offering a checque for £8,500 as a prize for the best article devoted to rational, fact-based environmental journalism. It will be called the Matt Ridley prize for environmental heresy, and he hopes that it will somehow bring David Cameron to his senses.

To the nearest whole number, the percentage of the world’s energy that comes from wind turbines today is: zero. Despite the regressive subsidy (pushing pensioners into fuel poverty while improving the wine cellars of grand estates), despite tearing rural communities apart, killing jobs, despoiling views, erecting pylons, felling forests, killing bats and eagles, causing industrial accidents, clogging motorways, polluting lakes in Inner Mongolia with the toxic and radioactive tailings from refining neodymium, a ton of which is in the average turbine — despite all this, the total energy generated each day by wind has yet to reach half a per cent worldwide.

If wind power was going to work, it would have done so by now. The people of Britain see this quite clearly, though politicians are often willfully deaf. …The biggest investors in offshore wind — Mitsubishi, Gamesa and Siemens — are starting to worry that the government’s heart is not in wind energy any more. …

So even if you accept the most alarming predictions of climate change, those turbines that have ruined your favourite view are doing nothing to help. The shale gas revolution has not only shamed the wind industry by showing how to decarbonise for real, but has blown away its last feeble argument — that diminishing supplies of fossil fuels will cause their prices to rise so high that wind eventually becomes competitive even without a subsidy. Even if oil stays dear, cheap gas is now likely to last many decades.

Great fun. If you have not read The Rational Optimist, you are missing something splendid. Or go to TED, and watch his lecture on “When Ideas Have Sex.”




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