American Elephants


Lessons For Obama, From 1793: George Washington Wrote: by The Elephant's Child

George Washington’ fifth Annual Message to Congress, was delivered on December 5, 1793, in written form. Speeches in those days had to be shouted, if there was a crowd — no microphones, no teleprompters — so President Washington’s Messages to Congress, even including his famous Farewell Address, were written, not spoken.

There are a number of passages in President Washington’s message that might recommend themselves to the attention of President Obama, as you will see.

President Washington expressed his humble gratitude for “the renewed testimony of public approbation” and for “the instances of affectionate partiality with which I have been honored by my country.” He would rather retire, but He will obey the suffrage which has “commanded me to resume the Executive power,” and he humbly “implores that Being on whose will the fate of nations depends to crown with success our mutual endeavors for the general happiness.”

He needs Congress to decide what should be done in regard to the treaties made with France about prizes, whether to allow them to be sold, or restored, or do we need protection of our territory by vessels commissioned. Congress needs to make rules or laws. It’s complicated and even the courts don’t know what to do.

The United States ought not to indulge a persuasion that contrary to the order of human events, they will forever keep at a distance those painful appeals to arms with which the history of every other nation abounds. There is a rank due to the United States among nations which will be withheld, if not absolutely lost, by the reputation of weakness. If we desire to avoid insult, we must be able to repel it, if we desire to secure peace, one of the most powerful instruments of our rising prosperity, it must be known that we are at all times ready for war. The documents which will be presented to you will shew the amount and kinds of arms and military stores now in our magazines and arsenals, and yet an addition even to these supplies can not with prudence be neglected, as it would leave nothing to the uncertainly of procuring warlike apparatus in the moment of public danger.”

When we contemplate the war on our frontiers, it may be truly affirmed that every reasonable effort has been made to adjust the causes of dissension with the Indians north of the Ohio. The instructions given to the commissioners evince a moderation and equity proceeding from a sincere love of peace, and a liberality having no restriction but the essential  interests and dignity of the United States. The attempt, however, of an amicable negotiation having been frustrated the troops have marched to act offensively.” As the seasons advance, we many need more troops than the number granted by law, and you need to address that and their compensation.

The Executive also has some anxiety about peace with the Creeks and the Cherokees. We’ve given the Creeks corn and clothing, and prohibited offensive measures against them.  Congress needs to provide for the current emergency. [T]he establishment of commerce with the Indian nations in behalf of the United States is most likely to conciliate their attachment. But it ought to be conducted without fraud, without extortion, with constant and plentiful supplies, with a ready market for the commodities of the Indians and a stated price for what they give in payment and receive in exchange. Individuals will not pursue such a traffic unless they be allured by the hope of profit; but it will be enough for the United States to be reimbursed only. Should this recommendation accord with the opinion of Congress, they will recollect that it can not be accomplished by any means yet in the hands of the Executive.”

To the House of Representatives:

On the first day of June last an installment of 1.000,000 florins became payable on the loans of the United States in Holland. This was adjusted by a prolongation of the period of reimbursement in nature of a new loan at an interest of 5% for the term of ten years, and the expenses of this operation were a commission of 3%.

The first installment of the loan of $2,000,000 from the Bank of the United States has been paid, as was directed by law. For the second it is necessary that provision be made.

No pecuniary consideration is more urgent than the regular redemption and discharge of the public debt. On none can delay be more injurious or an economy of time more valuable.

The productiveness of the public revenues hitherto has continued to equal the anticipations which were formed of it, but it is not expected to prove commensurate with all the objects which have been suggested. Some auxiliary provisions will therefore, it is presumed, be requisite, and it is hoped that these may be made consistently with a due regard to the convenience of our citizens, who can not but be sensible of the true wisdom of encountering a small present addition to their contributions to obviate a future accumulation of burthens.

But here I can not forbear to recommend a repeal of the tax on the transportation of public prints. There is no resource so firm for the Government of the United States as the affections of the people, guided by an enlightened policy; and to this primary good nothing can conduce more than a faithful representation of public proceedings, diffused without restraint throughout the United States.

Gentlemen of the Senate and of the House of Representatives:

The several subjects to which I have now referred open a wide range to your deliberations and involve some of the choicest interests of our common country. Permit me to bring to your remembrance the magnitude of your task. Without an unprejudiced coolness the welfare of the Government may be hazarded; without harmony as far as consists with freedom of sentiment its dignity may be lost. But as the legislative proceedings of the United States will never, I trust, be reproached for the want of temper or of candor, so shall not the public happiness languish from the want of my strenuous and warmest cooperation.

GEORGE WASHINGTON

(Reprinted and slightly revised from 2013)



“Crumbling Infrastructure” Is Just Another Lefty Lie! by The Elephant's Child

crumbling-infrastructure-2

Once again, we are back to “crumbling infrastructure,” This has been the one big thing Obama has had on his “to do” list since 2008. So important and he thought it would create all kinds of new jobs for his union supporters — but for six years it has been just talk. It seems to be the only Keynesian idea he has for creating jobs.  As usual, it’s all talk − no action.

What he wants is to confiscate 14% of the earnings of American corporations that is parked overseas. He claims a one-time tax that would be directed to repairing our “crumbling infrastructure.”The tax is a non-starter, of course, but who in their right mind would allow the federal government to confiscate money in banks around the world for just “one time? ”

Profits earned by an American company overseas are taxed in the country where they are earned. When what’s left after paying taxes to the host country is repatriated to the U.S., this country taxes it again. Our corporate tax is already the highest in the industrialized world, at 39.1%. The average for other countries is 25.1%. When companies pay lower taxes, they are more able to grow and hire and earn more, and so the income to the government rises — incentives. Democrats simply cannot get their minds around this phenomenon.

According to an OECD report, the United States spent 3.3 percent of its GDP from 2006-2011 on infrastructure. The European Union, with a larger GDP, has spent 3.1 percent. By the CBO’s statistics, infrastructure spending has been between 2.3 percent and 3.1 percent of GDP since 1956. Our infrastructure is in good shape, and the “crumbling roads and bridges” has been a leftist talking point to the point where everybody believes it, with no evidence whatsoever.

The president dramatically claimed “We’ve got more than 100,000 bridges that are old enough to qualify for Medicare.” Cute talking point, but a recent Reason Foundation study examined 20 years of state highway data to find that the condition of America’s state-controlled roads had improved in seven key areas. The percentage of deficient bridges in the country had fallen from 37.8 percent in 1989 to 23.7 percent in 2008.

The federal Highway Trust Fund, however, is running out of money. Some senators see this as a problem demanding a rise in the gas tax. But the fund is depleted because the money is being spent on frivolous things like bike lanes, rapid transit, light rail. even Amtrack. The fund was established to use gas taxes and tolls to keep up the highways.

Randall O’Toole is an expert at Cato on transportation issues. He writes:

Contrary to popular reports, our highways and bridges are in great shape. Despite the fact that Congress has diverted well over a fifth of gas taxes to non-highway projects, the number of bridges considered “structurally deficient” has declined by more than 50 percent since 1990 and the average smoothness of our roads has increased every year.

President Obama brags on the decrease in the deficit, and credits his fiscal management. At the same time he wants to eliminate the strictures on spending caused by the sequester — which is what forced a decrease in the deficit —that he has whined about ever since they were enacted. Obama says it’s time to end the “mindless austerity” and start spending again — just not on national security.

In fact, Obama just wants more money to spend. His budget proposals are meant as demands. He has already added more to the National Debt than the accumulated spending of all previous presidents put together — so now he wants to add another $6 trillion over the next ten years.



Recovery? What Recovery? by The Elephant's Child

From the Wall Street Journal’s “Notable & Quotable” Column:

Geoffrey Norman, writing online for the Weekly Standard, Jan 21.

What should be a recovery on steroids—after all, it has had six years to get in shape—is still not up to speed. If there were as many people in the labor force now, as there were when President Obama came into office, the unemployment rate would be close to 10%. And the spirit of entrepreneurship has dimmed to the point that, as Gallup finds:

“The U.S. now ranks not first, not second, not third, but 12th among developed nations in terms of business startup activity. Countries such as Hungary, Denmark, Finland, New Zealand, Sweden, Israel and Italy all have higher startup rates than America does. We are behind in starting new firms per capita, and this is our single most serious economic problem.”

And the worst of it is that:

“. . . for the first time in 35 years, American business deaths now outnumber business births.”

Plainly we need more regulation and higher taxes on small business.



No More Keynesian Economics, Obama is Turning the Page! by The Elephant's Child

Obama’s State of the Union speech claimed 2014 as a “breakthrough year for America,”with a growing economy and job creation at the fastest pace since 1999. Clever word tricks. If you count only jobs created, which he does, and leave out the jobs destroyed, the people who are so discouraged that they have dropped out of the workforce and  the growth in the population — you can get some pretty good job creation numbers, but they are meaningless except to fool the folks who don’t pay attention.

At this moment — with a growing economy, shrinking deficits, bustling industry, and booming energy production — we have risen from recession freer to write our own future than any other nation on Earth. It’s now up to us to choose who we want to be over the next fifteen years, and for decades to come.

It’s clear that all the happy talk did not resonate with the American people, who are seeing something different from the news of the day.

Mr Obama then began to make his pitch for “Middle Class Economics.” Unfortunately he tried to make it with Rebekah and Ben Erler of Minneapolis. Rebekah turned out to be a campaign staffer who he has used for “evidence” before.

At every step, we were told our goals were misguided or too ambitious; that we would crush jobs and explode deficits. Instead, we’ve seen the fastest economic growth in over a decade, our deficits cut by two-thirds, a stock market that has doubled, and health care inflation at its lowest rate in fifty years.

Middle class economics, he said, is the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone lays by the same set of rules. He really likes that phrase, it’s been in every speech for years. And it is meaningless. What is a “fair shot?” What is doing your “fair share?”

Apparently you don’t have to do anything, for the government will give you money. Paid sick leave, higher minimum wage, quality childcare, free community college, and if you have managed to save up for your kids’ college in a 529 plan (with money that has already been taxed) he plans to tax the distributions when you take it out to pay for the tuition.

It’s all a game of gotcha. Taxing 529 plan distributions is not going to pass Congress. The average account size of assets in 529 plans is $20,671. Saving that much up in a troubled economy is a real accomplishment. Why would you tax the same money once again?

So there you have “Middle Class Economics.” The right hand giveth and the left hand taketh away. It isn’t really supposed to accomplish anything, it’s just supposed to sound good.



The State of the Union is Not Strong, Mr. President. You Were Misinformed. by The Elephant's Child

President Obama gave a defiant State of the Union speech tonight, full of whoppers. He’s still congratulating himself for ending the War in Afghanistan, as fighters he released from Guantanamo are heading up ISIS in that country.

Several writers have referred to his ‘trolling’ Republicans. Byron York put it clearly:

With no real political clout on Capitol Hill and a job approval rating that has stayed mostly below 50 percent for a long time, Obama is trying to leverage the power he has left to force his agenda on the Republican majority. His big talk, executive actions, and outlandish proposals are the best ways he has to control the debate in Washington.

I think we misunderstand. Obama believes that he has successfully accomplished much of the fundamental transformation of America that he embarked upon, and he considers the two elections he won as validation of that ideology. Remember the extent to which the Democrats extolled Obama as young, fresh, new and interesting.?

I think people voted for the first Black President, and did see him as new and fresh. But I don’t think they were voting for “fundamentally transforming” the United States of America, or if they did, they didn’t mean by the phrase what Obama had in mind. Obama believes he has been quite successful, and Danielle Pletka got it right:

For Barack Obama, many of these are success stories; or to put it another way, isn’t Assad isolated? Don’t we almost have a deal with Iran? Look at Putin struggling, Castro releasing political prisoners. Look at the wars that have ended, China’s cooperation on the world stage, and recognize that while hundreds of thousands have died throughout the Middle East at the hands of terrorists, there has been no attack on American soil.

He has not changed his mind. He is defiant, and expects to combat Republicans all the way. He will attempt to use the tax-increases he wants as bargaining chips, and veto everything else. In the last few weeks, he has raised his approval rating back up to 50% with the help of his lapdog media, who have happily reported an economy in full recovery, (celebrating the phony 5% growth rate); unemployment rate down to 5.6% ( but of an increasingly smaller work force).

The scary numbers came out from Gallup last week. For the first time in 35 years, American business startups have fallen below the business failure rate. That has to be changed, or the American economy is not coming back. The U.S. now ranks 12th among developed nations in terms of business startup activity. And we pretty much know why. Overregulation, red tape, higher taxes, ObamaCare regulation and penalties, too much government, White House policies, bad business climate, muddled government rules. If new businesses are not starting up — where are the jobs supposed to come from?

The ideological Left believes firmly in more and bigger government, more controls, more regulations, and increased taxes to pay for it all. That’s what President Obama was proposing tonight. Leftists sneer at “trickle-down economics”— their name for lower taxes. But it’s far better for someone to use their money to start a business than to use their money to plan for tax avoidance. Lower taxes create more income for the government. Freed of tax avoidance schemes, free people invent, experiment and start new enterprises. They don’t need more government to tell them how to do business. They need government to get out of the way.

A  record 92.9 million Americans are no longer part of our workforce.

Seven years ago, before the recession, the economy was projected to have five million more jobs at the end of 2014 than we do. GDP was projected to be 11 percent higher in 2014 than it is. Annual output was projected to be $2 trillion higher, or more than $6,000 per person. And we won’t see much wage growth until there is a higher demand for workers.

The $8 trillion housing bubble did a lot of damage to the economy, and Obama wants to do the same thing all over again by reducing the down payment for a mortgage from 20% of the cost, down to 3% because he wants to see more people owning their own homes, which was what caused the housing bubble in the first place. If you don’t learn from your mistakes, you’re apt to repeat them.



Recessions, Depressions, Recoveries, Repudiations and Pretensions. by The Elephant's Child

141119_lowry_obama_ap

Obama has been working hard to emphasize how much he has done for the economy. He took a victory lap when he announced that the 2015 deficit will be only $483 billion.

‘The deficit has gone down by two-thirds since I was president of the United States,” President Obama said, calling his budgeting “responsible.”

My understanding is that the deficit has gone down because John Boehner outfoxed Obama in the negotiations regarding the sequester. Remember Obama’s attempt to stop the sequester spending cuts by shutting down national parks, airports and food-safety inspections? The decrease is a big deal, because under Obama’s fiscal management the debt had risen by more than $7 trillion — including the three largest deficits since World War II. Federal deficits don’t usually decrease, they just grow, and grow.

The Democrats have, in general, believed in Keynesian economics and the value of pumping money into the economy where it will circulate and like other noxious contagious diseases — multiply. Obama inherited a recession, added $830 billion in deficit spending right off the bat. Then the auto bailouts, cash for clunkers, green jobs, renewable energy, subsidies, food stamps, increased unemployment insurance, ObamaCare, and now, besides amnesty, he wants to give out free Community College, free sick leave, and undoubtedly some other goodies he will surprise us with on Tuesday night in the SOTU. He likes giving away stuff we have to pay for. Makes him feel magnanimous. He also wants to raise taxes on the rich. But that’s just an attempt to portray Republicans as the party of the rich, because he knows Republicans won’t raise taxes. (See the  last paragraph)

He’s restored full diplomatic relationship with Cuba, although he can’t do the embassy and ambassador part without Congress, and it’s not at all clear how this benefits anyone but the Castros, who have been trading their doctors for Venezuelan oil. But the Castros welcome our generosity, and our surrender.

It’s getting really hard to tell what is real and what is not. Improving employment numbers are touted, but then you find out that a larger number of potential workers have dropped out of the workforce. Jobless claims rise to 316,000. If the number of people receiving unemployment payments drops, it may turn out to be because they used up their benefits, or perhaps they retired.  And the number of Americans of working age no longer in the workforce keeps climbing. That number of people 16 years of age and older who are not employed and not making an effort to find employment hit a record 92,898,000.

So the numbers of employed are a segment of a larger and larger number of dropouts, and new jobs are a segment of a smaller and smaller work force. And in the meantime more young people are entering the work force, but not finding jobs. How do you get any real numbers out of that moving and growing ill-defined multitude? Of course you don’t, and the president will simply tell you what he wants you to hear anyway, and the media will repeat it until you’ve got it.

The big claim was about the big jump in GDP growth in the fourth quarter to 5%. Finally, the press announced, the Recovery! Except that number was apparently phony, since they did some tricks with the numbers — and the increased consumer spending and confidence turned out to actually be the higher costs of ObamaCare.

Numbers just out say that retail sales for December were down by 9%. and more American businesses are dying than new ones are starting up.

The good news is that the big reduction in the price of gas is a savings for every family budget, and will reduce some of the costs of business. Obama will undoubtedly take credit for that, though he has fought fossil fuels with everything he and the EPA could come up with.

You have surely noticed how often President Obama has referred to the Great Depression of the 1930s. He likes to compare his depression to President Roosevelt’s. Trouble is that his recession ended in June of 2009, while Roosevelt’s went on until World War II. Our political leaders have always tried to claim it was the result of capitalism run amok, but it was the result of Roosevelt’s bad  policies and endless tinkering.

But did you know about the Financial Crisis of 1920-21? The situation was grim, unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined by 17 percent. Despite the severity of the contraction, the Fed did not try to turn the money supply around and fight the downturn.

Instead, Harding cut the federal budget nearly in half between 1920 and 1922, He slashed tax rates for all income groups. The national debt was reduced by one-third. And then he allowed the economy to adjust. No pump-priming, no increased expenditures. Just the old-fashioned view that government should keep taxes and spending low and reduce the federal debt. And so he did. And the economy swiftly recovered, and hardly anyone knows that there was a recession in 1920-21. So there you go.

ADDENDUM: I corrected a spot in the third paragraph where I said deficit when I meant debt. My bad. It’s confusing enough without my brain freezes. I regret the error.



Why Liberal Governance Never, Never Works! by The Elephant's Child

There are strange gaps in Liberal thinking or understanding.  Take ‘Profit,’ for example. They seem to think profit is somehow bad, or at least ‘unfair,’ and business really shouldn’t be insisting on making a profit — without any understanding that the only reason for a business to exist is to make a profit.

And they really, really don’t get what happens when a business does not make a profit. Much was made in the last election that in Mitt Romney’s successful career of creating businesses, he sometimes cut back on employees, or closed parts of businesses and people lost their jobs. Obviously mean.

President Obama, from his first days in office, has promoted infrastructure, and crumbling roads and bridges as the source of bountiful new jobs, without the slightest understanding of the planning, zoning, environmental impact studies, and legal hurdles before the drafting and engineering would ever take place. An important project could take five, or as long as ten  years  or more, before actual construction ever began. Remember when he sheepishly admitted that perhaps there really weren’t any shovel-ready jobs.

Much has been made of the fact that the construction jobs involved in the Keystone XL pipeline are “temporary.” Yes. All construction jobs are temporary, and a worker who has learned new skills on one job can take them on to a better position at the next job.

Economist Allan Meltzer, in a recent essay, pointed out that the Federal Reserve tried to resolve real economic problems by printing money, which is not possible. The Obama administration insisted on imposing costly regulations on firms and industries. They supported stronger labor unions. They opposed tax reduction — and then they didn’t understand why the recovery was the slowest in history.

By creating enormous uncertainty in businesses about what new regulations might be imposed next, they limited expansion and start-ups as business hunkered down to wait it out.

The minimum wage, which is meant to be a starter wage for beginners, is regularly attacked by Liberals as not being enough to support a family. A raw beginner does not have the skills to be worth even a minimum wage. If they learn quickly how to make change, respond politely to customers, learn where things are and how to use them and can do so without much supervision, they begin to be worth the beginners wage. When they become skillful, see and pick up things dropped on the flood, notice, without being told, when customers need attention or tables need to be cleaned, have learned to be friendly to unpleasant customers, they have skills that can be taken on the next higher paying job. People aren’t supposed to stay in entry-level jobs, that’s why they are called “entry-level.” They are not intended to support a family. You are supposed to climb the ladder of success by learning.

When extra costs are imposed on a business, something has to give. Their prices can be raised, some employees can be laid off, the product or service can be cut back (see 1 inch narrower toilet tissue), or some part of the business can be automated. (See self-service gas stations, self-service hardware and grocery check stands, and Bank ATMs). Robots of one kind or another are replacing jobs once done by fallible human beings, who demand time off, sick leave and more benefits.

Every action taken by government creates incentives of one kind or another. ObamaCare is full of incentives, most of which seem never to have occurred to the politicians who devised the health care insurance in the back rooms of Congress. The Democrats have been surprised or astonished to find out what has been caused by the incentives they created, and they still mostly don’t understand.

An easy example is the Medicare Drug Benefit. Deplored by Republicans as too costly (statins have been very successful in helping seniors to avoid costly heart surgery, for example). Democrats were outraged by the  “donut hole” which  provided a  major incentive for seniors to use a generic drug instead of a named and more costly prescription of equal quality. The Drug benefit has been a shining example of  a bill that did not cost more than projections. Democrats have stripped out the “donut hole” incentive as “unfair,” so costs will go up, astonishing Democrats.

Many prominent Democrats have never done anything else but politics, Chuck Schumer, Harry Reid, Nancy Pelosi and Joe Biden come to mind. Those who bring other skills, doctors, military service, or simply the ability to read a balance sheet can be valuable. Making laws is about more than making speeches and appearing on TV.




Follow

Get every new post delivered to your Inbox.

Join 7,049 other followers

%d bloggers like this: