American Elephants


Nancy Pelosi Wants to Raise Your Taxes, Among Other Things. by The Elephant's Child

I have long believed that Democrats simply don’t understand economics at all, but day by day it is becoming clear that is not only true, but drastically underestimates the situation.

Only today, a confident House Minority Leader Nancy Pelosi (D-CA) predicted that in the upcoming ‘mid-terms’ in November, Democrats will take back the House and immediately push for amnesty for the so-called ‘Dreamers’ and more gun control legislation. She said that Democrats would “revisit” Donald Trump’s tax cuts and push for an infrastructure bill to “build the infrastructure of America—housing, schools, bridges, water.” You will note that “infrastructure” is always the magic word. She also spoke about building the country’s “human infrastructure,” including education and health care for young people and pension security for their families. She said Democrats will run on “fairness and justice.” Sure they will.

Bernie Sanders goes even farther. He advocates government jobs for everyone, free college, free healthcare, family leave, more generous social security, and probably lots more free stuff, but I couldn’t write that fast.

How does that work? Of course, it doesn’t. Democrats believe that they are the smartest people in the country. Hillary explained quite seriously that they were the enlightened, brilliant, caring and the people who voted for Trump were retarded, ignorant, racist backwoods “deplorables.” (She also said innocently that she had used that line at all her campaign meetings in the Hamptons and everybody thought it was a funny line.)

Back to economics. Guess which economic forecaster accurately predicted growth in 2017? Back at the end of February, the White House released the annual Economic Report of the President. Democrats like Jason Furman who served as the top economic adviser in the Obama White House, say President Trump’s forecasts were way too optimistic.  Mr. Trump says his tax cuts and deregulation will restore robust growth, and Mr. Furman called the Trump estimates “absurd.” James Freeman at the Wall Street Journal referred reporters to the report in which the Trump team predicted 2.3% real economic growth for the calendar year 2017. Which was right on the button.

How do you make an economy grow? Obviously something has to change. In the past the great moves forward have come in response to major innovation:  the Erie Canal opened the Midwest, the telegraph connected the coasts, the continental railroad, and now the internet and information technology. Trump has cut taxes for everyone, but the budget is still way too big and the national debt isn’t any smaller and Trump wants to build a wall clear across the southern border.

Quietly, Trump has begun to whittle away at the power and permanence of the ruling class by slashing regulations and limiting powers that Congress foolishly allowed the state to take over. The bureaucracy has a say over nearly every aspect of American private and commercial life with no accountability. Democrats are screaming bloody murder over Scott Pruitt’s actions at the EPA—sure that he is destroying the environment. He is not.

The EPA had moved to enhance government control over — the nation’s “navigable waters” which they construed as anything that flowed from your downspout into a stream that flowed into a river that eventually made it into a real navigable water. That’s an enormous amount of “control.” Bureaucracies issue “guidance documents” that provide business with directions about how to comply with the law. Sounds innocent, but Congress makes the law and leaves it up to the bureaucrats to implement them, so their suggestions pretty much have the power of law. For business, the removal of overbearing, useless regulations has been huge, because useless regulations come with a cost of compliance. Apply that freedom across the government, and no wonder business is passing out bonuses and raising salaries and having the money and freedom to expand and innovate.

Bad news for Democrats and the anti Trump mob. Jobless claims are near a 45 year low, job openings are near a record high, and growing shortages of skilled labor are forcing companies to increase pay or improve benefits to attract or retain employees according to Market Watch. The lead Democrats had at the end of last year is gone. Issues like gun control and immigration are not working. Most voters are crediting Trump, not Obama, with the strong economy.

The Mueller probe is falling apart as a federal judge has raised concern over the scope of Robert Mueller’s investigation. U.S. District Judge Amy Berman Jackson questioned whether Rosenstein’s “directive appointing Mueller granted him more authority than Justice Department regulations appear to permit” because Justice Department rules require that a special counsel be notified of a “specific factual matter” to pursue. Mueller’s team were even searching Manafort’s home and storage locker before Rosenstein broadened the special counsel’s purview in an August 2017 memo. The Nunes Committee is finally getting the information they have been seeking after threats of impeachment and disgrace, and it’s not pretty. Stormy Daniels was supposed to be the final nail in the Trump coffin, but it appears that the Trump voters don’t really care about an aging porn star.

Republicans are not inclined to fall in love with presidents. They approve or disapprove of what the administration is doing. They recognize American presidents as simply ordinary men with all the flaws and faults that means—called upon for a special job, and hope that they will measure up and do at least part of what needs doing. And we call upon the Constitution to keep them in line and instruct them in how to do the job. We seem to know a little more history than the Left does, and recognize that the desire for ever more control leads inevitably to tyranny. Freedom is messy. People say things that you don’t like, they argue, they may call you names, they try to regulate, to tell you what to do, to force you to do it their way — but to be free, to pass freedom on to your children, you have to tolerate a little mess.

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Here’s What They Have In Mind For You And Me by The Elephant's Child

Do you often wonder what the Left is going on about? Angelo Codevilla describes them in his book The Ruling Class. He introduces the Ruling Class, the group of  bipartisan political elites who run America. The Ruling Class, educated at prestigious universities, convinced of its own superiority, benefits by raising  taxes and expanding the reach of government. This class maintains that it knows what is best for regular Americans and continues to increase its power over every facet of American life, from family and marriage to the environment, guns and God. I speak of the Left, but Codevilla is speaking of the bipartisan bunch who together run the show, and of course what we are now calling “the deep state.”

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“[P]icking economic winners and losers redirects the American people’s energies to tasks that the political class deems more worthy than what Americans choose for themselves. John Kenneth Galbraith’s characterization of America’s economy as “private wealth amidst public squalor” (The Affluent Society, 1958) encapsulates the complaint of our best and brightest: left to themselves, Americans use land inefficiently in suburbs and exurbs, making it necessary to use energy to transport them to jobs and shopping. Americans drive big cars, eat lots of meat and other unhealthy things, and go to the doctor whenever they feel like it. Americans think it is just to spend the money they earn to satisfy their private desires, even though the Ruling Class knows that Americans must learn to live more densely and closer to work, that they must drive smaller cars, if they drive at all, that they must change their lives to use less energy, that their dietary habits must improve, that they must accept limits on how uch medical care they get, that they must divert ore of their money to support those people, cultural enterprises, and plans for the planet that the Ruling Class deems worthy. So ever-greater taxes and intrusive regulations are the main wrenches by which the American people can be improved (and yes, by which the Ruling Class exercises its privileges and grows.) “



Here’s Some of the Excitement of “Earth Day” by The Elephant's Child

Yesterday was “Earth Day” which I take no notice of.  Penn State University, however marked the day by announcing that they would refuse to allow a near-century old recreation club— The Penn State Outing Club founded in 1920—to organize the outdoor, student-led trips of camping and hiking . It seems they judge the activities to be too risky. Two other outdoor recreation clubs — the Nittany Grotto Caving Club and the Nittany Divers SCUBA Club have been directed to end trip offerings.

Mark J. Perry Ph.D. a professor of economics at the University of Michigan Flint, writing for the American Enterprise Institute, posted a spectacular list of 18 examples of the spectacularly wrong predictions made around the first “Earth Day” in 1970.

1. Harvard biologist George Wald estimated that “civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind.”

2. “We are in an environmental crisis which threatens the survival of this nation, and of the world as a suitable place of human habitation,” wrote Washington University biologist Barry Commoner in the Earth Day issue of the scholarly journal Environment.

3. The day after the first Earth Day, the New York Times editorial page warned, “Man must stop pollution and conserve his resources, not merely to enhance existence but to save the race from intolerable deterioration and possible extinction.”

4. “Population will inevitably and completely outstrip whatever small increases in food supplies we make,” Paul Ehrlich confidently declared in the April 1970 issue of Mademoiselle. “The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.”

Here are the other fourteen: The true believers heard this news, swallowed it
whole, and attributed any suggestion that they were not true to the “deniers.”

A good many of the most hysterical anti-Trump crowd are in despair or fright because he withdrew from the Paris Climate Accords, which would have accomplished nothing, nothing at all for the climate. An amount too  small to be measured, the scientists said.



The Most Vapid Conversation Ever? by The Elephant's Child

This conversation took place about a year ago on Bernie Sanders’ show, featuring Bill Nye, “the science guy” who apparently doesn’t know any. This is perhaps the most vapid, inane, totally empty of thought or meaning conversation I have ever heard.

Science consists of hypotheses that can be tested and the results can be retested by others and come up with the same results. Bill Nye keeps referring to those who do not agree with him as “deniers,”which is just a slur since no one denies that the climate changes. The climate has been changing for millions of years. The climate science that alarmists extol comes out of computer programs, not the real world. And there is no 97% consensus among climate scientists. That has been thoroughly debunked.

James Hansen, former director of NASA’s Goddard Institute for Space Studies, who Nye cites, wrote a paper in 2008 that claimed his climate models showed that exceeding 350 ppm of CO2 in the atmosphere would have catastrophic effects. We have long since blown past that point, and the result has been the greening of the Earth. CO2 is a natural fertilizer for plants, and the plant growth is feeding a hungry world.  Plant nurseries keep their greenhouses at somewhere around 1,000 ppm, and the nurserymen are still healthy. Real world evidence clearly shows Hansen’s theory was wrong.

Bernie Sanders serves on Senate committees on the environment and climate. Bill Nye spoke of the rising sea level, and how it would force the people of New Orleans to abandon their homes, and they would leave behind great coils of wire and pipes. These two gentlemen clearly have no idea what they are talking about, but they care deeply about global warming. A situation that seems to be common on the Left.  This level of sheer ignorance should be disturbing.



Venezuelan Oil Can No Longer Support a Communist Government by The Elephant's Child

Some of you might remember when Venezuela was a beautiful and prosperous nation. But Americans mostly don’t pay that much attention to South America, I suppose because of the language barrier, which is why we pay more attention to our English-speaking allies, and Europe.

The proven oil reserves in Venezuela are recognized as the largest in the world, totaling 297 billion barrels, as of January 1, 2014. In early 2011 the Venezuelan government under Hugo Chavez announced that the nation’s oil reserves had surpassed those of Saudi Arabia, the long-term leader. OPEC said the Saudi reserves stood at 265 billion in 2009.

Wikipedia says “Venezuela’s development of its oil reserves has been affected by political unrest in recent years. In late 2002, nearly half the workers at the state oil company PDVSA went on strike, after which the company fired 18,000 of them.” I think it has been pretty well proven that “state owned” is not a particularly good idea, nor is business trying to play politics.

Reuters reported that state-owned PDVSA is completely falling apart, with workers walking off the job at a frightening pace. The conditions for oil workers have been deteriorating for years with shortages of food, unsafe working conditions, and hyperinflation destroying the value of paychecks. President Nicolas Maduro has sacked the head of PDVSA and handed control to the military in order to keep the armed forces on his side. Major General Manuel Quevado has only accelerated the decline. Apparently every Venezuelan military officer has a Cuban minder.

Venezuelan oil is a very heavy crude, which needs more in the way of refining than light crude, but Venezuelan refineries are breaking down from neglect and lack of investment.

Reuters reports that about 25,000 workers have quit PDVSA between January 2017 and January 2018, a staggering sum. PDVSA employs roughly 146,000 people. Thousands of workers are walking off of job sites, fed up with going to work hungry, putting their lives at risk at rickety refineries, all for a paycheck that fails to cover even the most basic expenses.

Fires have broken out, and the loss of both top-level engineers and managers as well as experienced workers means the losses will only get worse. Refineries are falling apart, and ports are reducing operations because of a lack of workers.

PDVSA accounts for about half the nation’s oil production — the rest are joint ventures. Last Tuesday, Chevron said that two of its workers were arrested. Chevron has not fled the country as many of its peers have, but the arrests may change matters. This is the first direct hit on an international company operating in Venezuela. At some point the costs of operating will become too high. The amount of oil available on the market will decline, the price of oil will increase. Maduro’s grip on the nation will become even more shaky. There’s not that much more available for him to squeeze.



Raul Castro Has Resigned From the Presidency of Cuba by The Elephant's Child

The General Assembly has voted in a new president, the hand-picked former Vice President Miguel Diaz-Canel. The Constitution of Cuba is modeled after the Soviet Union’s and similar to modern-day China’s meaning the legislature has full control over who becomes president and who joins his cabinet. The former vice president has a reputation for following orders very successfully.

Many of our news outlets assumed that this was a big deal, but it is not. Raul Castro remains to run the Communist Party, which runs everything else.

Chapter I, Article 5 of the Cuban constitution makes the Communist Party “the superior directing body of society and the State, which organizes and orients the common efforts towards the end of the construction of socialism and advancement of communist society.” This makes the head of the Communist Party—Castro—the “superior” director of the State, above his future successor.

Who remains as commander in chief of the Revolutionary Armed Forces (FAR) of Cuba is not entirely clear from the constitution, as Fidel and Raúl Castro have typically been both president and comandante.

The head of government’s powers are fairly limited:

  • Represent the State and Government and manage general policy
  • Organizing and lead activities by the Council of Ministers
  • Control and attend to the development of activities at the ministries

Last year, Mary Anastasia O’Grady wrote in the Wall Street Journal about a brief uprising of a” Venezuelan National Guard Captain and some 20 others who had gotten some 120 rifles, ammunition and grenades from an armory at Fort Paramacay in Valencia. There were unconfirmed reports of similar raids at other military installations. ”

“The Cuba-controlled military regime put tanks in the streets and unleashed a hunt for the fleeing soldiers.” She added that “Cuba had embedded about 50 high-ranking Cuban military officers, 4,500 Cuban soldiers in nine battalions, and 34,000 doctors and health professionals in Venezuela,  with orders to defend the tyranny with arms. Cuba provides Maduro’s personal security and thousands of other Cubans hold key positions of the State, Government, military and intelligence and counterintelligence services.” What their part is in the starvation in Cuba is unknown.

Burning Cuban flags, when they can be had, is now practically a national pastime in Venezuela because Venezuelans understand the link between their suffering and Havana. The Castro infiltration began over a decade ago when Fidel sent thousands of Cuban agents, designated as teachers and medical personnel, to spread propaganda and establish communist cells in the barrios.

In an August column, O’Grady pointed out that Cuba is not “simply a dictatorship.” For the regime it is a “historical political project” aiming for the establishment of a Cuban-type regime throughout Latin America. The Cubans have taken Nicaragua, Bolivia, Ecuador and are now going after Columbia. Castro is dependent on Venezuelan oil and the money from the narcotics business. Fidel died at 90, and Raul is getting up there. There are a number of younger Castros in government, but future succession is unknown.

Now Venezuela cannot afford to export oil, and is having to import oil itself. The people are starving, and trying to get out of the country. Lefties are always sure that those other people just didn’t do it right, but Communism has a way of always ending up very, very badly.

ADDENDUM: According to Humberto Fontova, writing at Front Page Magazine, “Much of the vital day-to-day functions of the Stalinist regime will remain in the hands of Raul Castro’s son Alejandro Castro-Espin, a KGB-trained colonel in Cuba’s secret police and a fanatical Stalinist. Alejandro denounces the U.S. as “an Empire of Terror” and shrieks that “Cuba will never return to capitalism.” He was the one secretly in charge of “negotiations with” (demands upon) the Obama administration in 2014. Nothing was more vital to the Castro-Family-Crime Syndicate than securing and growing that multi-billion-dollar lifeline from the U.S.  So naturally fanatical Stalinist and secret policeman Alejandro was put in charge of securing and protecting this flow through the Stalinist regime’s jugular.” Fontova adds:

“The annual cash flow from the U.S. to Cuba for almost the past decade (mostly in remittances and travel expenses after Obama opened the spigot) exceeds what the Soviets used to send Cuba at the height of their sponsorship back in the 1970’s and 1980’s. In brief, thanks to Obama, the U.S. became Cuba’s new Sugar Daddy—and just in the nick of time. President Trump has closed this economic lifeline only slightly. We’ll see what happens now with the clear-eyed on Castroism Pompeo and Bolton in charge.”



Life’s Little Surprises Always Await Us. by The Elephant's Child

In the Wall Street Journal today, James Freeman brought up the historic tax reform that Trump signed in December may turn out to be his finest hour, ‘trumping’ even  the firing of James Comey. So many companies have reported positive news from the tax law, even though it’s barely four months old.  The Journal calculated that the four giants of American retail banking— JPMorgan, Wells Fargo, Citigroup and Bank of America have saved a total of $2.3 billion in the first quarter thanks to the new federal corporate tax rate of 21%, down from 35%.

Is that a big deal? Nancy Pelosi is arguing that the tax cut is a useless disaster, and when the Democrats get back in they will promptly raise taxes back to where they should be. (This is a campaign promise? Why?)

Wages have been growing. “Kroger, Walmart, Target Corp. and other food retailers are investing savings from the federal tax law to boost worker pay and benefits, ” the Journal reported recently. John Kartch at the advocacy group Americans for Tax Reform has been keeping a running tally of businesses (now 507) responding to their lower tax bills by announcing pay raises, bonuses, and higher 401K matches. The good news began to arrive almost as soon as President Trump signed the legislation.

Democrats seem to have a hard time getting their minds around the basic consequences of economic incentives. The Labor Department has reported that this is oficially the best job market for those seeking work in the history of  U.S. government statistics. Lefties are quite sure that the best results come from soaking the rich, by which they seem to mean the Koch Brothers, rather than themselves and their friends and supporters.

Ann Althouse notes that a new WaPo poll “finds that the gap between support for Deocatic vs. Republican House candidates dropped more than half since the beginning of the year.” A WaPo/ABC News poll found that 78 percent of registered voters considered voting for a candidate whose views on gun rights and gun control matched their own was either very or extremely important. 21% said it was somewhat or not important at all.

Investors Business Daily reported in an editorial on the macroeconomic effects of the tax reform bill. The Congressional Budget Office admitted that they had vastly overestimated the cost of the Trump tax cuts, because it didn’t account for the strong economic growth they would generate.

In any case, the CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.

The CBO report also makes clear that this faster-growing economy will offset most of the costs of the Trump tax cuts.

In a table buried in the appendix of the CBO report, it shows that, before accounting for economic growth, the tax cuts Trump signed into law late last year would cut federal revenues by $1.69 trillion from 2018-2027.

But it goes on to say that higher rate of GDP growth will produce $1.1 trillion in new revenues. In other words, 65% of the tax cuts are paid for by extra economic growth.

Well, goodness. There might just be some reason to question conventional wisdom. The Center for Immigration Studies reported a few weeks ago that Trump’s Wall on our Southern Border would, over time, pay for itself, because illegal immigrants add a lot of cost with their dependence on welfare, crime, benefits and health care.  Who knew?  One can only urge Ms. Pelosi to keep railing about the necessity of raising taxes.

Among other surprises, a previously unknown asteroid the size of a football field had a near miss with Earth on Sunday. It came within one half of the distance to the moon.  It was the largest known asteroid to pass that close to Earth in observational history. Life always has interesting little surprises for us, even if we are paying attention.




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