American Elephants

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


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.

Practicing Up For The State Of The Union Speech! by The Elephant's Child


President Obama is out campaigning and making speeches (his favorite activity) in preparation for the upcoming State of the Union Speech. He went to the Ford Assembly Plant in Wayne, Michigan to celebrate the resurgence of the American Auto Industry and the milestone of the end of the TARP program, which he claimed “repaid taxpayers every dime and more of what my administration invested in you.”

Except Ford turned down federal assistance and didn’t accept a dime. And the claim of a profit from the Troubled Asset Relief Program was a myth. The taxpayers loss may have been less than the program’s $700 billion commitment, but it was still a loss.

Then he went to Phoenix to talk about housing at Central High School.

But we all know what happened in the last decade when responsibility gave way to recklessness.  Families who did the right thing and bought a home that they could afford, and made their payments each month, and did everything right, when the market plummeted they got hurt.  Even though somebody else was acting irresponsibly — whether on Wall Street, or folks who weren’t responsible in terms of how they were dealing with their real estate — ordinary families got hurt bad.

He did seem to be aware that “there were folks who borrowed more than they should have” (but it wasn’t really their fault), so of course he wants to do it all over again. “President Obama Explains How FHA’s 3%-Down Mortgages are Great for America.”  No more having to put down 20% of the selling price, and he plans to also cut the mortgage insurance premium rate so the new homeowner saves $900 a year to spend on other stuff. We got the “Great Recession” because Democrats in Congress wanted to get people into their own homes and forced  the nation’s prudent bankers to ignore the prudent rules of banking and make bad loans. So let’s do it all again?

Then it was on to Knoxville Tennessee, and the Pellissippi State Community College to “focus on the centerpiece of my education agenda.” He wants to make community college free — “because in America a quality education cannot be a privilege that is reserved for a few.” Students have to pay for it by keeping their grades up. Only 30-40% of community college students finish two years. What educators are learning is that the students who have to pay their own way are the ones who take it seriously and really profit from their schooling. An expert I just heard on the radio about this subject said that the jobs over the next ten years would be for students with only a high-school education and there would be shortages of jobs for college graduates. ( Didn’t get the name, nor source of information). Most people who have commented say it’s a dumb idea, and raising the cost on taxpayers is a non-starter.

Obama said that 2014 was a “breakthrough year for America.” In December, our businesses created 240,000 new jobs. [A record 92,898,000 Americans of working age did not participate in the labor force last month. The labor force participation rate dipped back down to 62.7 percent from 62.9 percent in November.] If we create jobs in a market where the number of Americans who have dropped out increases, does it still count as an improved job situation?

There are 20,000 “shovel-ready” jobs awaiting approval of the Keystone XL pipeline which Obama says he will veto. He says they are only temporary jobs—which is true — but all construction jobs are temporary, and the skills learned can take you to the next construction job. He also claims that the pipeline would only carry Canadian oil, but that ‘s not true either, as oil from the Dakotas would be transported as well.

It would be nice to have some straight talk, numbers we can believe in. I think this president just presents only that which will place him in a favorable light, true or just made-up. There are still a lot of Americans who believe in working hard and paying your own way. That kind of determination and commitment breeds the inventiveness and can-do spirit that has made our country a beacon to the world.

Today’s $68 Billion Train to Nowhere to Be Finished in 80 Years? Splendid Idea. by The Elephant's Child


On Monday, Governor Jerry Brown, Democrat, took an oath of government frugality in his fourth inaugural address. The next day he led the groundbreaking ceremony for  California’s $68 billion bullet train in Fresno.

Seven years ago, in 2008, voters approved $9 billion in state bonds to build a 500-mile train connecting San Francisco and Anaheim (current estimates suggest more than $100 billion). The feds have donated a mere $3.3 billion, which by law must be spent by October 2017. California’s high-speed rail authority can’t access the bond proceeds until it gets the right of way from the state courts, which are presiding over numerous legal challenges that may not be settled for several years.

The  authority has so far obtained less than a fifth of the parcels needed to complete the first 29-mile stretch in the Central Valley.

This does not matter to Mr. Brown and the rail authority who are frantically trying to burn through the federal funds to meet the White House’s spending deadline. The LA Times says that  “over the next 1,000 days, the state will have to  spend $3 to $4 million every single day to accomplish their goal.”

Bullet train supporters believe that state judges will be reluctant to block access to bond funds once construction starts. The more schools,  homes and businesses torn down, the better. The goal is to make the bullet train an accomplished fact, in order to convince the judiciary that it is. California’s record of starting and then abandoning freeways, and infrastructure projects meant the Legislature added provisions to ensure the train did not become a “stranded investment.”

Planners picked the flattest, straightest and most desolate stretch for the first segment. It gets more complicated crossing the 7,680′ high Tehachapi range, and tearing up densely populated areas in the Bay Area and Los Angeles Basin.

I have over 40 articles about California High-Speed Rail Authority. They uniformly think it’s nuts. Some estimates are 80 years till completion. Thinking back 80 years, to the changes in technology, population, culture, one must conclude that today’s plans are unlikely to fit 2094 transportation needs at all. And the federal $3.3 billion is all they have to work with at present since a state judge last year barred it from tapping the voter-approved $9 billion in bonds until it satisfies a quantity of requirements in the ballot initiative.

The Governor said that those who don’t support the bullet train are pusillanimous — “lacking in spirit” he said, but the actual definition is not so bland.

A Dozen States Start Off The New Year With Lowered Taxes; More to Come! by The Elephant's Child

urlA dozen States are delivering a gift for their taxpayers. Residents of Arizona, Florida, Indiana, Kansas, Maryland, Michigan, Minnesota, Nebraska, New York, Ohio, Rhode Island and Wisconsin will get lower tax bills in 2015. A welcome message indeed.

Missouri and Oklahoma have trimmed taxes for 2016 and 2017. The American Legislative Exchange Council calculates that no state has made more significant tax cuts than Wisconsin, where an average family will pay about $680 less than last year. Governor Scott Walker, a Republican, has presided over tax cuts totaling $800 million, including the largest  property tax cut in Wisconsin history and a cut in the state’s income tax.

Nebraska has cut income, property and state sales taxes by more than $410 million in 2014 over the next five years. Indiana has lowered the business property tax and corporate business taxes which will help to boost employment. Michigan has reduced its business property tax and Rhode Island cut its corporate income tax rate from 9% to 7%. Florida, already one of the lowest tax states has reduced driver’s license renewal fees by $25. New York, Minnesota and Maryland 3rd, 5th, and 7th highest taxes in the country have cut their state tax rates.

States are noticing that the federal government is doing nothing to increase employment or reduce taxes. Democrats are usually sure that if the government has more money to spend on jobs programs, then employment will grow, and the money the newly hired earn will spread through the economy in splendid Keynesian fashion. Unfortunately it doesn’t work, but they  never learn.

Republicans intend to reduce the corporate tax rate as a sure boost to the economy and increased employment. The Keystone XL pipeline is high on their list with its guaranteed 20,000 new jobs. The president vows to veto, but he’s having an ever-harder time explaining his position.

In a Difficult Climate, Republicans Have Some Stellar Accomplishments! by The Elephant's Child


I wrote a couple of days ago:

Conservatives everywhere constantly wonder what is the matter with the left, and try to find a satisfactory answer. We just had what can fairly be called a “wave” election.  Republicans will control the House of Representatives by 247 to 188 Democrats. They will control the Senate, by 54 to 44 with 2 independents. The GOP controls the governorship and the legislature in 23 states compared to 7 states for the Democrats. Legislative power has slipped from the hands of the American left.

This is a marvelous accomplishment. Even if you give all the credit to Obama’s policies (He did say that his policies were on the ballot) instead of to the Republicans, it is something to celebrate. Yet what I am reading and hearing is how awful John Boehner is, and that the Republicans should dump him. This is not the people’s choice, it’s the choice of the members of the House about who they choose to lead them.

Back in October, the House had passed more than 200 bills, which Harry Reid promptly tabled, and the Senate passed a mere 59 bills. That’s possibly a record low. I think the Senate ended up passing 111, and the House over 400, but I’m not sure of those numbers. The point is that bills do not become law with just the vote of the House.

Much has been made of the fact that we won the election, and how come they didn’t repeal ObamaCare, slash the national debt and stop Obama’s executive illegal immigrant amnesty? Doesn’t work that way. Even with both House and Senate, a bill does not become law without the president’s signature, or enough votes to override his veto.

Did you notice that John Boehner outsmarted Obama in the 2013 budget negotiations and because of John Boehner federal spending has declined over a five-year period for the first time since the post World War II cutbacks. The sequester has decreased total federal spending 1.5%-2.0% in real inflation-adjusted dollars, and it will do the same in 2014.

Largely because of Boehner, and also the much maligned Mitch McConnell, the unfolding catastrophe of ObamaCare is fully a Democrat disaster. There has not been a single Republican vote for any part of it. They own it! That may be the reason Republicans regained the House and Senate.

Obama has told our enemies publicly just what our strategy will be and when we will leave the battlefield, which has made every military person cringe. John Boehner does not reveal Republican strategies in advance. His job is not to lead the nation, nor to act as a cheerleader for the conservatives or the establishment — but to weld a bunch of fractious politicians into a political band that can accomplish as much as possible in difficult circumstances. That means accepting losses where they are inevitable, horse trading, and trying to squeak some important stuff through in spite of the odds.

Nearly two million fewer Americans are receiving jobless benefits than a year ago, in part due to the elimination of an extended benefits program last December. Economists on both left and right agree that generous jobless benefits keep people from looking for work and discourages employers from offering work. Businesses have to pay higher wages to urge people away from benefit programs, and taxes go up to pay for the benefits.

The Cromnibus bill, that 1,603-page bi-partisan $1.2 trillion federal funding bill prevents the EPA from regulating farm ponds under navigable waters legislation. Not a big deal? Andy Johnson received a state permit to build a little dam to create a watering hole for his cattle along the Six Mile Creek that crosses his property. He did not get a separate permit from the Army Corps of Engineers because the creek flows into the Black Forks River which flows into the Green River which the EPA had designated under the 1972 Clean Water Act as a “navigable interstate water of the United States.” Fine from the EPA — $75,000 per day! The EPA’s attempted power grab is both far-reaching and outrageous.

The EPA can’t implement a White House proposal to cut dairy industry methane emissions by 25% by 2025. Their attempted listing of the greater sage grouse and the Gunnison sage grouse as endangered can’t be done until studies prove it necessary. There’s the poultry poop posse attempting to regulate chicken poop, and  an order to limit cow plop to eliminate 500 liters of individual cow emissions of methane. Reined in.

Obama promised $3 billion to poor countries in retribution for climate damage caused by our fossil fuel pollution — that got cut. Even Michelle Obama was reined in — school lunch programs will not be restricted by standard low-sodium and whole-grain menus. Kids will be relieved.

I complain a lot that this regulation business is getting out of hand. Credit John Boehner tor reining them in and for doing some hard bargaining.


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