American Elephants


An Embarrassing Exercise in Budgeting. Obama Should Be Ashamed. by The Elephant's Child

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Progressives have a vision of money circulating through the economy, creating offspring wherever it goes. I find it very odd, but that’s what they get out of Keynesian economics. You give somebody food stamps, and the grocery store pays their providers and their sales clerks, and the clerks and providers  buy other stuff, and so on and on, and somehow it grows and multiplies on the trip.

They are not very good at math either, which shows up clearly in their spending and budgeting.  President Obama has released the final budget plan of his lame duck presidency and it will be ignored by Congress, as it should be. He wants to expand the federal government which is already obese, and he wants big tax hikes to pay for it.

But 70% of federal spending amounts to taking money from one set of pockets and putting it into another pocket. In spite of their constant claims of fighting income inequality, very little of this money goes to help the poor. There is housing assistance, food stamps, welfare programs and Medicaid — programs that comprise only 25% of all the payments to individuals.

It all starts with an enormous $2.7 trillion tax increase over ten years. This is on top of the increases Obama has pushed over previous years. In ObamaCare, the tax hikes totaled $1.2 trillion over a decade, and then right after his re-election in 2012, he demanded a $600 billion tax hike on upper-income earners as the price for not imposing bigger hikes on the middle class. If he were to get away with this disgraceful budget, it would add somewhere around $4 to $5 trillion over a decade or at least $400 billion each and every year. Of course the standard reply is a trillion here, a trillion there, and pretty soon you’re talking real money! So why shouldn’t we tax the one percent even more? What we want — is to tax everybody less.

The federal government is not thrifty, nor is it a careful or honest custodian of the money they collect. Government waste is an ongoing scandal. There are somewhere around 45 different job training programs in as many different departments that are remarkably good at failing to increase employment. Excess regulation wraps businesses in a web of expense and wasted time in compliance. And there is less money and less confidence for expanding or hiring or growing. Top that off with higher taxes — and what you get is the kind of sluggish economy we have today.

The more sluggish the economy, the more the Progressives will try to fix it — with more regulation and probably more taxes. There does not seem to be an agency of the federal government that has not been politicized under this president, and the scandals mount.

Obama’s budget relies on “deep and unsustainable reductions in defense spending to make the deficit look smaller than it would otherwise be given his policies.” Defense spending is already at historically low levels, but then Obama sees little need for defense spending. He firmly believes that Iran would never use a nuclear weapon, though what they want with those intercontinental ballistic missiles is a puzzlement.

Mr. Obama does insist that “one of the greatest challenges of our time is climate change”and he wants to double funding for clean energy research and development by 2020. I’m sure that a 50 percent increase in funding for the EPA will go over well.

Environmental organizations raise bundles of money by featuring baby animals, starting with harp seals, and settling finally on polar bears. Baby polar bears are cute, and American are suckers for cute animals, but the polar bears are not endangered but are thriving. Federal funding for subsidies and grants are a rich source of money for big investors.

Al Gore’s global warming activism has increased his net worth from $700,000 in 2000 to an estimated $172 million by 2015. “He has also had a remarkable record of investing in companies right before they get huge grants from the federal government.”

The billionaire Elon Musk is chairman “of a number of companies such as Tesla Motors and Solar City which rake in billions in green energy subsidies. In 2014, Musk received $1.4 billion from Nevada taxpayers to build a ‘gigafactory’ for his electric car company Tesla Motors.” The MSRP for a Tesla is reportedly over $100,000. SolarCity also got a large payout to move to Nevada. When Nevada changed the way it subsidized solar power in a way that didn’t favor Musk or SolarCity, the company pulled out of the state.”

Tesla also sells lithium ion-battery Powerwalls for a mere $7,340 to store electricity for homes. The original intention of a Powerwall was to make rooftop solar panels economically viable for consumers. Powerwalls are estimated to take approximately 40 years to pay for themselves. Naturally, Tesla only offers five to 10 year warranties and predicts they will last for only 15 years.

Nice work if you can get it, though I cannot understand why taxpayers should be subsidizing billionaires’ playthings. That’s what hedge funds and angel investors do, not what the federal government should be doing with taxpayer money.



A Strong Rebuke to the President of the United States by The Elephant's Child

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On Tuesday the Supreme Court issued a stay that blocked the federal government from implementing a series of far-reaching environmental regulations that essentially crippled the entire coal industry. The rules were issued by the Environmental Protection Agency as part of President Obama’s attempt to force America’s energy sector to reduce their carbon emissions to conform to the administration’s demands.

Once again acting on his “presidential authority,” the president was making laws that would close hundreds of coal-fired power plants, because the president believes that CO2 is a pollutant (it is not) and that CO2 is the cause of global warming (it is not). Mr. Obama was trying to set an example for other countries to do the same, to comply with the unenforceable agreement that came out of the Paris Climate Talks—COP21.

Because of a 5-4 majority on the court, nothing will be done to implement those changes until an appeals court can formally rule on a challenge brought by 27 states, and corporate and industry groups against the EPA. What the Supreme Court has done is to restore some sense of accountability to an agency that has attempted to become a legislative body without any authority to do so.

The appellate courts will now have to give the 27 states the opportunity to make their case. The Supreme Court is not just saving the jobs of coal miners and the economy in several states, but calls attention to the rule of law at a time when the president of the United States has come to believe that he doesn’t have to bother with the consent of Congress. He just rewrites the law and dares the critics to stop him.

That stay will remain in effect through the end of Mr. Obama’s presidency, until the Supreme Court has a chance to hear the case—in 2017 at the earliest. The stay sends the strongest possible signal that the court is prepared to strike down the Clean Power Plan on the merits, assuming the next president doesn’t revoke it.

Not since the court blocked President Harry Truman’s seizure of the steel industry has it so severely rebuked a president’s abuse of power. …

In a ruling two years ago the court held that the EPA couldn’t conjure up authority to make “decisions of vast economic and political significance” absent a clear statement from Congress. Thus, the EPA may have the authority to require power plants to operate more efficiently and to install reasonable emissions-reduction technologies. But nothing authorizes the agency to pick winners (solar, wind) and losers (coal) and order generation to be shifted from one to the other, disrupting billion-dollar industries in the process.

The EPA has been rebuked by the courts repeatedly. In January the House joined the Senate in trying to stop another of Obama’s “power grabs” — the EPA’s attempt to seize control of virtually all waterways across the country. The federal government has used the EPA as its proxy and the Clean Water Act to enact its ideas about controlling privately owned land through the regulation of waterways. This year they extended, without congressional input, their authority through the 1972  Clean Water Act.

The Obama administration excused this attempted appropriation as nothing more than an effort to save the nation’s streams, headwaters, creeks and wetlands from “pollution and degradation.” In reality, the EPA simply wanted to expand its command over such near-waterless features as dry creeks, potholes and puddles . Under this regime, private individuals or businesses would need government permission to do anything on their property that is even remotely related to water — such as digging a drainage ditch — giving Washington sweeping powers over private lands.

A federal judge told the EPA last August that they had gone too far, but they just shrugged and said they would enforce the rule in the 37 states that were not part of the lawsuit. “Administrative Law” is one of those innocuous phrases in which the Left excels, like the substitution of  “extremist” for “terrorist.” But you must pay attention to the real meaning — which is the substitution of agency regulation and presidential orders or directions or memos  for the lawful actions of Congress. As Jonathan Turley, professor of Law at George Washington University said:

“What the president is doing is not one of the dangers
the Framers were concerned about; it is the danger
the Framers were concerned about.”



Social Justice, The Attack on Freedom, and The Drive for Control. by The Elephant's Child

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— Under the United States Constitution, laws are supposed to be made and changed by the legislature, not by the president and his unelected bureaus and agencies and departments. They call laws issued by the president or one of his minions “administrative law,” which sounds innocuous unless you really stop and think about it.

Most presidents, facing defeat at the polls, make an effort to  try for  bipartisanship. Obama does not operate that way. He despises Republicans, and has set all his legal people to work trying to find ways to pass everything he wants on his own authority.

So here we go again. A proposed rule from the Department of Labor would compel businesses to reveal the names of outside attorneys or labor relations consulting firms with whom they contract. Then the consultants and attorneys contracted would be required to publicly disclose all other similar clients and how much they were paid for their services. George Leef says:

There is nothing illegal in contracting with attorneys and consultants who advise management on the legalities of and tactics relating to fending off unionization. But with time running out in the Obama administration to do favors for Big Labor, the Labor Department wants to do as much as it can to deter companies from dealing with such specialists.

The applicable federal law is the Labor Management Reporting and Disclosure Act. That law was catalyzed by the explosive McClellan Committee hearings in 1957-8, which disclosed, as the statute recites, “a number of instances of breach of trust, corruption, disregard for the rights of individual employees, and other failures to observe high standards of responsibility and ethical conduct….” The thrust of the law, therefore, was to increase transparency on the part of both companies and unions.

One provision of the LMRDA requires employers to name consultants they hired who directly spoke to workers, to solve the supposed problem of workers not realizing when they were being sweet-talked by management allies. But the law also includes an exception (Section 203c) for those who simply give advice to the company.

— If you can’t confiscate America’s guns because the public and the Congress won’t approve, there must be another way:  It’s called “Operation Choke Point” which is a Justice Department effort to require, through the FDIC — forcing banks to stop providing financial services to certain industries.

The businesses in ill favor are lawful firearms dealers, payday lenders, escort services and other companies. Justice has encouraged banks to provide services to others like illegal marijuana sales, marijuana shops, abortion clinics, or radical environmental organizations.

Banks find the restrictions onerous, and require extraordinary amounts of due diligence and excessive paperwork. The government  hasn’t been successful at ammunition restrictions, or with false claims about gun shows, so they’re trying a more oblique attack. Congress has passed a bill attempting to end this improper, illegal run-around.

— The Equal Employment Opportunity Commission (EEOC) wants to know just how much you are getting paid. The administration is chasing “Income Inequality” not to make sure that some people are being treated unfairly, but for control.

‘The EEOC announced changes to its required EEO-1 report requiring employers to submit employee W-2 earnings and hours worked. All employers with at least 100 employees would be required to comply. EEOC and the Office of Federal Contract Compliance Programs (OFCCP) would jointly have access to the data for enforcement purposes.”

“Pay data will be reported in 12 pay bands (e.g. pay band 5 is $39,000 – $49,000) and by race, ethnicity, sex and job category (e.g. 13 black female professionals in pay band 5).”

The Obama Progressives talk equality, but they mean equality for the hoi-polloi  (which is you and me). They don’t mean themselves — such a big mass of hoi-polloi would require skilled administrators and executives and rulers to whom such pedestrian social justice laws do not apply.

Republicans talk about Big Government, and this is what they mean, but they are quite guilty themselves in sending their laws on to agencies and bureaus and commissions to administer. It will take a very able and experienced president who understands the problem of administrative law, and is willing to fight to do something about it.

You mostly don’t slip into Socialism and lose your freedom and autonomy overnight, it’s a long process, and you wake up one morning and it’s gone.



How Democrats Lie and Mislead About the American Economy by The Elephant's Child

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—The correct minimum wage is $0.00. If you want to hire your neighbor’s 11 year old kid to mow your lawn or pull weeds, you should be able to offer him something under the current minimum wage.

The goofy Democrat line is “But you can’t raise a family on the minimum wage.” Well, no you can’t, but by the time you have a family, you should have some skills that are more useful than those of a pure beginner. We forget that employment, like everything else in the economy, depends on supply and demand. The supply of people who can do a simple minimum wage job successfully is very, very large. The supply of those who can run a giant corporation with 20 divisions, 20,000 employees and country-wide or international reach is significantly much, much smaller. The average tenure for a CEO as head of a corporation is only six years.

—Wal-Mart, America’s largest employer just announced that they will close more than 150 US stores — which will mean that 10,000 employees will lose their jobs. Shutting down underperforming stores will help to move the company back to health, when it can create more permanent jobs. Wal-Mart voluntarily raised its base wage to $9 an hour last April, but this resulted in a 10% drop in earnings. A Union backed group that has heckled the retailer to raise it’s entry level wage, was astonished. But the job losses are the direct result of the changes made at Wal-Mart.

—Here’s Economist Mark Perry at AEI with a list of ten reasons why economists object to the minimum wage.

Obama and Hillary are still pretending that women are paid less than men because America’s employers discriminate against female workers. The Left needs women to be victims, and Hillary is running on her qualifications as a woman. “Today, women account for almost half of the workforce,” Obama huffed. “But the typical woman who works full time still earns 79 cents for every dollar that the typical man does.” Bogus statistic, and Obama knows it, for it simply depends on comparing all women to all men. It has been against the law to pay women and men who do the same job differently since 1963.

Unless women stop getting married and having children, and start abandoning careers in childhood education for naval architecture, this huge gap in wages will almost certainly persist. Democrats thus can keep bringing it up every two years.

—Income inequality, the basis of the entire Democrat campaign, is a factor of demographics. Kids starting out have little income and may have big student loans, or renting an apartment or buying a used car are big expenses. There are more middle-age and old people now than there used to be, and older people tend to have more money than their younger counterparts simply because they have been earning money much longer.

A 70 year old man has been saving most of his life. He owns his home. his children are  grown, he gets Social Security on retirement, and has benefited from a life-long buildup of career skills and connections and is apt to have far more money than a 30 year old. There is a clear relationship between age and the median net worth of people in every quintile. There are more old people as the baby boomers reach retirement age, and the birth rate has dropped so there are fewer young people. Do not let the Democrats fool you with their whining about Income Inequality. Sheer Demographics.

—In his remarks to the Press on Friday, when he bragged about the wonderfulness of his economy, Obama mentioned the drop in the cost of gasoline as one of his beneficial outcomes. That happened in spite of Obama, not because of Obama, as a result of the glut of oil based on Fracking. Obama’s instinctive response is to try to slap a $10 a barrel tax on oil so he can raise the cost of gasoline at the pump — while having more taxes to invest in “clean energy” which is pure waste. Obama’s wind and solar investment, in spite of the huge subsidies and grants, provide a resounding 0.3 percent of America’s energy.

(additional sentence added about equal pay for women)



A Brief Comment on Obama’s Rose Colored Glasses by The Elephant's Child

President Obama: press briefing, Friday, February 5, 2016, on the just released jobs report:

TGIF, everybody.  I wanted to stop by, because as you’re aware by now, America’s businesses created another 158,000 jobs last month.  After reaching 10 percent in 2009, the unemployment rate has now fallen to 4.9 percent — even as more Americans joined the job market last month.  So this is the first time that the unemployment rate has dipped below 5 percent in almost eight years.  Americans are working.

All told, over the past six years, our businesses have added 14 million new jobs.  Seventy-one straight months of private-sector job growth extends the longest streak on record.  Over the past two years, 2014 and 2015, our businesses added more jobs than any time since the 1990s. …

So, as I said at my State of the Union address, the United States of America, right now, has the strongest, most durable economy in the world.  I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire.  I guess you cannot please everybody.

Zero Hedge: 02/05/2016, 10;14 a.m.
Headline : “70% Of Jobs Added in January Were Minimum Wage Waiters and Retail Workers”

For those curious where the big jump in earnings came from, the answer appears rather simple: the reason, according to the BLS’ breakdown of jobs added in January (per the Establishment survey), of the 151,000 jobs added in the past month, retail trade added 58,000 jobs in January, while employment in food services and drinking places, aka waiters and bartenders, rose by 47,000 in January.

Simple: state regulations demanding higher wages for minimum wage workers starting January 1, which as discussed previously will promptly lead to employers passing on wage hikes costs to consumers in the form of 10% higher food prices starting in NYC and soon everywhere else.

This is the full breakdown of January job gains:

  • Retail Trade: +58K
  • Leisure and Hospitality, which includes food workers: +44K
  • Professional and business service workers, excluding temp workers: +34K
  • Manufacturing workers posted a curious rebound, rising by +29K. We are confident this number will be revised promptly lower.
  • Construction +18K
  • Wholesale Trade: +9K
  • Education and Health saw a big and unexplained drop from 54K to 6K
  • Information services added just 1K workers
  • As for sectors losing workers included Temp Help workers, Transportation and Warehousing (courtesy of the truck and train recession), Mining and Logging, and Government workers.


Politicians Dream and Create Nightmares for Businessmen by The Elephant's Child

McGovern
A little history: George McGovern was a Senator from South Dakota. After college, he became a bomber pilot in the Air Force in World War II, then got a PhD in History and became a professor. In 1957 he became a U.S. Congressman, and then a Senator in 1967. He ran a grassroots campaign for the presidency in 1972, and lost in the biggest landslide in history, winning only Massachusetts and the District of Columbia. He retired from the Senate in 1981 after a long and distinguished career.

He spent several years on public lectures around the world, for he was an expert in world food problems, and in 1988, invested most of the earnings from the lecture circuit acquiring the leasehold on Connecticut’s Stratford Inn. He had always been fascinated with Inns, hotels and restaurants, and it was “the realization of a lifelong dream to own an Inn with a restaurant and public conference facility, complete with an experienced manager and staff.”

He promptly went bankrupt, and in 1992 he wrote an article for the Wall Street Journal, headed with a quotation from Justice Felix Frankfurter:

Wisdom too often never comes, and so one ought
not to reject it merely because it comes late.

In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn’s 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender.

Today we are much closer to a general acknowledgment that government must encourage business to expand and grow. Bill Clinton, Paul Tsongas, Bob Kerrey and others have, I believe, changed the debate of our party. We intuitively know that to create job opportunities we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities.

My own business perspective has been limited to that small hotel and restaurant in Stratford, Conn., with an especially difficult lease and a severe recession. But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never have doubted the worthiness of any of these goals, the concept that most often eludes legislators is: “Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.” It is a simple concern that is nonetheless often ignored by legislators.

The article was truly notable, for it was a pretty big  admission from a devout liberal that legislators didn’t have a clue about business. “One-size-fits-all” rules ignore the reality of the marketplace, and the thresholds they set for ‘regulatory guidelines’  don’t fit the reality of how business works.

Congressional Democrats may have had a few moments of reconsideration, but they quickly went right back to their comfortable, traditional  way of despising business and businessmen and trying to extract more taxes from the affluent in order to make everything more equal and more “fair.”

Senator McGovern died in 2012 at the age of 90.



Free Markets, Free People, Free Minds, Free Speech by The Elephant's Child

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How do  you make an economy grow and prosper? An constant theme among the Democrats focuses on dividing up existing wealth. They are quite sure that affluent Americans have reached their wealthy state at the expense of the poor and the middle class. Their solution is to take the excess wealth from the rich and give it to the poor in the form of government grants of one sort or another.

The important point is that there is no growth nor prosperity in their plan. Bernie Sanders can promise free college for all which he intends to accomplish by taking more money from the rich, whether in much higher taxes on their income or some kind of direct grab of their untaxed wealth in offshore shelters or wherever they are hiding it.

The problem is that the Democrats are far more interested in “equality” than they are in creating wealth. They really don’t understand how wealth is created, they are much more caught up in class envy. A constant theme of the current Democratic presidential race has been income inequality, with a belief that America’s rich have reached their status at the expense of the poor and the middle class. Perhaps they always think of wealth as a pie, divided into servings, and the rich get the big pieces so there is little left for the poor.

They are big on “diversity” so they are currently intent on moving poor minorities into well-to-do suburban neighborhoods. Every neighborhood should be diverse, no more black neighborhoods or ethnic neighborhoods. My German ancestors came to Germantown in Pennsylvania when they arrived in America. Human beings are tribal, and want to live with people who are like themselves, and speak the same language, and eat the same kind of food, celebrate the same holidays — it’s natural, and happened with most ethnic groups who immigrated.

How do you create wealth? New small businesses start and gradually grow into big businesses, not all of them of course — but all big businesses once started as little businesses.

And those small businesses began with an idea. How do you generate ideas? Some of them start with irritation with a tool, for example, when someone is frustrated with a tool that does not accomplish the desired task, and they just figure there must be a better way.  For most, it stops there because they have no idea how to turn their idea into a business. Those who create a business don’t necessarily have knowledge of how to successfully run a business. And how to run a business is divided up into many different skill sets.

All those inventions that have changed the world — think of how Edison’s little lightbulb changed life all across the world, and all the millions of other inventions and businesses that have derived from cheap, dependable light— when the sun goes down.

It’s autonomy — the quality or state of being independent, free and self directing. The capacity of a rational individual to make an informed, uncoerced decision. Why do the Democrats hate freedom so much?




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