American Elephants

It’s the Economy, Mr. Obama. Armageddon Approaches. by The Elephant's Child

The 2012 election is about the economy.  Even Obama admitted it in his speech at Cuyahoga Community College in Cleveland last week. Obama said:

Yes, foreign policy matters.  Social issues matter. But more than anything else, this election presents a choice between two fundamentally different visions of how to create strong, sustained growth.

President Obama believes firmly in Big Government. He believes that growth, strong, sustained growth comes about because of government ‘investment’ in the economy. Government investment in new industries, government investment in new ideas, government investment in training people, government investment in education, and government investment in clean energy. That’s a lot of government investment of “government money,” which of course comes from the taxpayers. We know this because he has demonstrated over and over that this is his belief and his program.

Obama’s fiscal 2013 budget shows federal spending increasing from $2,983 trillion in 2008 to an all-time record of $3,796 trillion in 2012 — an increase of 27.3%. The federal budget deficit for the last budget by a Republican-controlled Congress was $161 billion for fiscal year 2007. Obama’s budget deficit for 2012 is $1,327 trillionthe highest in world history.

The federal debt held by the public will double during Obama’s four years. In just one term, Obama will have increased the national debt as much as all prior presidents from George Washington to George  W. Bush combined.

Unemployment stands at 8.2 percent, and the CBO expects the rate to remain there for the remainder of the year. The Federal Reserve expects the growth rate to remain stuck below 2%. Obama remarked in Cleveland that “Governor Romney and his allies in Congress believe deeply in the theory that…the best way to grow the economy is from the top down.” Huh? What? His plan, “our North Star — an economy that’s built not from the top down, but from a growing middle class.” A middle class is the result of growth, not the other way around.

The foundational economic theory of Obamanomics is that even though the economy expanded “during the last few decades,” the middle class stagnated. The rich  took all the money, and they ought to give it back. He has said repeatedly that the U.S. has gone off the track in the last few decades — just when the tax rates started to fall dramatically.

Obama said in The Audacity of Hope that he didn’t buy the theory that the high marginal tax rates that existed when Reagan took office hurt incentives to save and invest.  In other words, he does not accept that the Reagan revolution set off a 20-year economic boom. Evidence doesn’t matter. The Left didn’t like Reagan.

Obama rejected the recommendations of his own debt commission.  The Bowles-Simpson Commission would have reduced or eliminated tax breaks while lowering the top tax rate to no higher than 29 percent. This would have resulted in a huge tax increase, but the amount of new revenue would not be enough to balance the budget without restructuring of entitlements.

To fund a federal government where ObamaCare is operating and Social Security is funded and domestic “investments” are financed, the Democrats would need more revenue. They always think that higher tax rates on the rich and maybe a value added tax on everybody else will be the way to get their hands on the cash.

So we have looming on the financial horizon “Taxmageddon” — the one-year $494 billion tax increase that looms on January 1, 3013. This is not what the economy needs when it is already deep in the doldrums from over-regulation and  uncertainty. The recent spate of bad economic news — everything from weak consumer sales to bad consumer sentiment is a sign that the economy continues to slow even more. Businesses, investors and, entrepreneurs can’t plan for the near future. They don’t know what their taxes will be in a few months and they can’t tell if investments they might make would be profitable. Translation: no hiring.

Congress needs to stop the disaster of Taxmageddon and end the uncertainty as soon as possible. If it doesn’t act, they risk a return to a second recession, even deeper. You might want to contact your Congressional representatives and urge prompt action.


Small Government Is Best! Here’s Why. by The Elephant's Child

We dastardly Republicans don’t keep saying these things because it’s a habit, or because it’s what we said before, and before, and before (though we did). We don’t say  it because it is an item of faith in our religion. We don’t say it because the big Cheeses in our think tanks told us to say it. We don’t do “talking points.” We say “Small Government is best” because that’s what the evidence shows, and what our own experience teaches us.

If you prefer EPA flyovers every day or two, checking up on how much you are watering, or whether you are growing the right plants, or if you like the BIG size of soft drinks, or if you want to pack your kid’s school lunch yourself because you know what he likes, or if you just like plain old incandescent bulbs, and don’t think it’s anyone’s business how long your shower lasts — well, you get the idea.

Small government is best.

A History Lesson for Obama. by The Elephant's Child

I didn’t expect to use the same image again so soon, but it fits this story even better.  Obama believes in government spending (Boy, do we have evidence of that!) so much so that he refers to it as “investment.” Last Thursday, here in Seattle, reported the Wall Street Journal, he once again displayed his unfamiliarity with history — at least the parts that he has not inserted himself into.

“When I hear people talk about the free enterprise system and entrepreneurship, I try to remind them, you know, all of us made that investment in Darpa [the Department of Defense Advanced Research Projects Agency] that helped to get the Internet started,” said Mr. Obama. “So there’s no Facebook, there’s no Microsoft, there’s no Google if we hadn’t made this common investment in our future.”

Microsoft—a product of the Internet? That may surprise Bill Gates and Paul Allen, who founded the software company in 1975. The company didn’t introduce its first Internet browser for another 20 years, and in the meantime it became the dominant computer software company long before the Internet became economically important. The irony of Mr. Obama’s error is that for much of Microsoft’s history the Internet was seen as a threat to its desktop dominance.

Darpa is engaged in funding research. This can be a proper role for government. But Darpa does not attempt to commercialize products. Facebook and Google, like Apple and Microsoft, were founded by private investors. In his State of the Union speech in January, Mr. Obama suggested that federal research spending “led to the computer chip.” Credit for the first integrated circuit has generally been awarded to Jack Kilby at a company called Texas Instruments back in 1958.  Other innovations came from Bell Labs, Fairchild Semiconductor and Intel.

Mr. Obama’s error in his assumption that all prosperity flows from government, demonstrates why he keeps trying to solve problems by throwing money at them. Notably, he is putting pressure on Congress to approve another economic stimulus plan. “Each of the ideas on this list will help create jobs and build a stronger economy right now,” Mr. Obama said.  Well, no they won’t.

He wants to give small businesses tax breaks for hiring more workers, but that’s not how it works. He wants to help homeowners to refinance their mortgages, he wants to help veterans find jobs. And he wants to spend up to $34.7 billion for those proposals — but that’s just a part of a more comprehensive $447 billion jobs program that Congress has mostly resisted, for good reason. And he really doesn’t want to cut spending at all— because he believes that spending is how you fix things. Calling spending “investment” leads you into strange pathways.

You would think that at this point one would learn from experience, but the One doesn’t. And that’s the real problem.

The “Nanny State” Isn’t Funny. It’s a Power Grab. by The Elephant's Child
March 3, 2012, 5:21 pm
Filed under: Education, Freedom, Law, Statism | Tags: , ,

Jessie Sansone’s four-year-old daughter drew a picture of a man with a gun in her Kitchener, Ontario kindergarten class, with a crayon — and then all hell broke loose.

Waterloo Police met Sansone at the school when he tried to pick up his children. He was told he was charged with possession of a firearm, he was handcuffed and put in one of the several squad cars waiting outside. At the station, he was strip-searched, told to disrobe and bend over, then put in a cell.

Police went to his house, told his pregnant wife that he had been charged with possession of firearms, and that she would have to come with them, and her 15 month old daughter would have to go with a social worker. Mrs. Sansone called her mother who rushed over to take the child. The children had been taken without their parents’ knowledge to Family and Children’s Services and were being interviewed by social workers.

Sansone said that police searched his house and found a plastic gun that shoots foam darts. Sansone said his daughter was drawing him getting the bad guys and monsters.

These things happen with increasing frequency. Lack of common sense, political correctness, overreaction, Nanny state.

Local police say they will review how they handled the case, but won’t apologize. The head of Children’s Aid said she would do everything the same way tomorrow. The superintendent of Waterloo Region District School Board, Gregg Bereznick, said:

“We do work hand in hand with the families because we co-parent.”

There’s the problem, in a nutshell. Co-Parent? When did parents allocate co-parenting to the state? The Alberta government has just released an updated Education Act which tells homeschooling families that they cannot teach certain things in their homes. Under this new bill, nothing in the education of a child can go against the Alberta Human Rights Act.

If you recall, this was the “Human Rights” group that prosecuted Ezra Levant for 900 days under that act for daring to publish the Mohammed cartoons in his former magazine, The Western Standard. And this was the group that unsuccessfully prosecuted Mark Steyn for quoting what another author said about Islam in an article.

O.K. This is Canada. But we have had the same sort of thing here. Children belong to the state? Didn’t we just have an example of government deciding what your children may eat and determine that the lunch mother packed at home is not suitable?

Government will decide what kids are to be taught and how much is to be education and how much is to be indoctrination? Are your children to be taught to fear global warming or that there is controversy about climate change? Have you gone to YouTube to view “the Story of Stuff?” Are your kids learning history from Howard Zinn’s deplorable People’s History of the United States? Have you read your kid’s school books?

Big Government And The Invisible Hand. by The Elephant's Child

Republicans talk a lot about Big Government, when they aren’t talking about Jobs and Free Enterprise, complaining about Spending and ObamaCare, Solyndra, Fast and Furious, and Defense, and a few other things as well.  So what’s the big deal about Big Government?

The United States of America was devised as a country of free people who granted certain limited powers to their government. Politicians, being what they are, are by their very nature inclined to think that they ought to do something about whatever seems to be a problem. Liberals — or Progressives as they prefer to style themselves, since ‘liberal’ has become a tainted word — as the perpetually discontented party — are  convinced that government is capable of solving all problems.

If you are going to buy that, then you probably believe that there are real experts, that the masses of ordinary citizens aren’t too bright and need governmental help. And that’s where we get into trouble.

The private business of health insurance is not going to be so private anymore.  Insurance companies that want to raise their rates will have to publicly justify their actions if they want to raise rates by 10% or more, according to Kathleen Sebelius HHS Secretary.  The Obama administration will decide what are acceptable rates.  Maybe Ms. Sebelius can speak to the packing companies about the price of bacon — it’s really gone up!

The Obama administration will also design a basic benefits package for the private insurance companies, telling them what they must cover,  The “essential benefits package” will be designed by “independent experts” from the Institute of Medicine and will be built on mid-tier plans currently offered by small employers, expanded to include certain services such as mental health, and squeezed into a budget. Private insurance companies will be required to follow the rules if they want to sell policies to small business.  You’ll be pleased to know that officials will hold “listening sessions” around the country before final decisions are made. Uh huh.

The newly created Consumer Financial Protection Bureau (CFPB) got its first director, and President Obama has declared that” Bank of America’s decision to impose a $5 debit card fee is exactly why we need somebody whose sole job it is to prevent this kind of stuff from happening.” I yield to no one in my annoyance at the new fee, but it isn’t President Obama’s job to tell a private bank what fees they may or may not offer. All power rests in a single director. Bad idea.  Scrap the agency. There are no consumer safeguards and it’s an unnecessary agency.

There is a crisis faced by many hospitals that can’t get their hands on a growing list of both routine and life-saving drugs.  Doctors are rationing, clinical trials interrupted and black markets have emerged.  What’s happening? Lots of excuses, but it boils down to governmental ignorance of the invisible hand described by Adam Smith in 1776. The free market solves supply and demand, over time, by adjusting price. High prices call forth more supply, large volume users get discounts. It is a natural self-organizing marketplace. Instead, government experts have fixed prices by specifying Medicare reimbursement which also sets the benchmark for private insurers.  Remove the ability to raise prices when demand exceeds supply and shortages will follow.

The drive to force kids to eat the foods of which Michelle Obama approves continues. The Department of Agriculture wants to limit starchy foods to one cup a week per student. That is potatoes, lima beans, corn and peas.  Having eliminated donuts, partially hydrogenated vegetable oil, soft drinks and high-fructose corn syrup they are on to new territory.  They want kids to try new vegetables. (American Samoa, Puerto Rico and the Virgin Islands may serve yams, plantains or sweet potatoes to meet the grains/ bread requirement).  US officials admit that the proposed regulations “may pose a particular challenge to implement.” What they don’t seem to grasp is that the federal government has no business dictating the food choices of our kids.

The Obama administration is seeking new power over hiring and firing at religious institutions.  Americans hear constantly about the threats posed by the religious right who want to offer a short nondenominational prayer at graduations or football games. The Obama administration wants to control who religious institutions can hire or fire, and are declaring that the ‘ministerial exception’ is not grounded in the First Amendment, and that the free exercise clause nor the establishment clause have nothing to do with a church’s relationship with its own employees. Injecting itself into personnel matters is way over the line.

Thanks in part to environmental rules, electricity rates are about to get double-digit increasesJust as Obama promised.  Utilities are seeking permission to pass on hundreds of millions of dollars in new charges to customers for the cost of upgrading and retrofitting power plants so they won’t emit any of the carbon dioxide  that our planet needs so much. The costs due to “tougher environmental regulations” are avoidable. They are the product of choices, most of them unsound. Trying to scrub and eliminate CO2 emissions is counterproductive.  CO2 is not a pollutant but a naturally occurring gas necessary for life.

Most of these government encroachments would take place without much notice, but when you look at the big picture, the continuing grasp for control is pretty scary.  It isn’t any one regulation, it’s the spider web of big laws and little regulations, the proliferation of agencies and departments designed to control this or that aspect of citizens lives. It is the impulse to tyranny, devised by those who think they are smarter than everybody else, think they know better what people need.  Then layer on the one “expert” put in charge, the regulations designed to favor supporters, the laws foolishly devised by those who have no idea how the economy works, and suddenly you awake one morning in 1984.

They aren’t smarter.  Their laws aren’t going to work— as has been proven over and over by the evidence they won’t bother to investigate — and the only question become can we stop it before it all collapses?

Central Planning by The Elephant's Child
April 18, 2011, 5:50 pm
Filed under: Capitalism, Economy, Freedom, History, Statism | Tags: , ,

We complain about “paternalism,” and about “nanny government,” and about the “elites” in Washington who presume to tell us how to live our lives.  People hate twisty CFL lightbulbs, and resent the governmental ban on ordinary incandescent bulbs, especially when they find out that the ban was initiated so lightbulb makers could make more profit. Calorie counts on all menus, forbidding children from bringing their lunch from home, restrictors on showerheads, the list goes on and on.

It is all the same syndrome. Instead of turning their attention to their own lives, they want to meddle in everyone else’s. First it is for your good health. Then it is to save energy, and save water, then it’s just something that annoys them, and pretty soon it’s a regulation that would help out a major supporter.

Power corrupts, and soon those who attain power start believing that government, at their direction, can better decide how taxpayer money should be invested, that government can do better research, that government can decide what products should be made and how they should be sold. Back in 2008, candidate Obama called for “an end to the age of oil in our time.”  He called for one million plug-in hybrids capable of 150 miles to the gallon.  He called for a $7,000 tax credit for consumers who bought early models.  He demanded one half of all car purchases by the federal government would be plug-in hybrids or all-electric by 2012.

How did we slip from a market-based economy to central planning? What made a community organizer, someone whose only executive experience was the disastrously failed Annenberg Challenge, and a stint as a part-time lecturer in civil rights law, decide that he knew better than the American people what products we should buy and use and produce? There’s a long history of Central Planning, and it never, never works.  Government, at best, is an enormous clumsy bureaucracy that does almost everything badly.

It’s top-down versus bottom-up.  When an individual has an idea, hones it until he has it right, is willing to mortgage his house and beg money from his relatives, then has to convince investors, venture capitalists or banks to finance his dream— and has to prove it over and over to bring it to market— that’s bottom-up. Some assume that vast spending by government will overcome technology hurdles, consumer preferences, and business acumen, and then economies of scale will bring down the price so the product can be justified in the market.

Lord Acton, the British historian, said “Power corrupts, and absolute power corrupts absolutely.”  The Founders had experience of governmental power and they were wise enough to write a Constitution that limited the power of government.  We the People grant certain powers to our government —but government is not entitled to keep enlarging those powers without our consent, even when they think it’s for our own good.

Let’s Just Soak the Rich: The Liberal Answer! by The Elephant's Child

We don’t really have to cut spending, they say.  Just raise taxes on the rich and on those obscenely rich corporations.  Bill Whittle takes the theory on, with the help of IowaHawk.  Here’s the way the world really works.

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