A Voice in the Wilderness In Defense of "Mere Conservatism"

Krauthammer + Goldberg = Demoralized Obama

I often wonder what men like Barack Obama think when they read such devastatingly accurate analysis of his (and his Party's) economic performance since January of 2009 as that provided by Charles Krauthammer and Jonah Goldberg today.

Obviously as a self-confident progressive-liberal - one from the "head-in-the-sand when anyone proves you're doing a rotten job" school of politics taught in Chicago - the president is set in his ways and ostensibly certain of his ideology's eventual success, but a twinge of doubt has to scurry down his spine (if and) when he reads columns like the ones Chuck and Jonah laid down this week.

Or if not the president himself, perhaps more importantly, his supporters.

The first of the rhetorical beat-down came from Dr. Charles Krauthammer, nationally syndicated columnist from The Washington Post.  The good Doctor deftly makes the critically-important point that the current administration's biggest problem isn't any inheritance it received from George W. Bush, but its own ideology and belief system.  The notion that "shovel-ready jobs" (via the stimulus) would turn the world's largest economy around is painfully naive.

"Shovel-ready was not as shovel-ready as we expected," observed President Obama this week, enjoying a nice chuckle about the unhappy fate of his near-$1 trillion stimulus. To be sure, Obama has also been promoting a less amusing remedy for anemic growth and high unemployment: exports. In this year's State of the Union address, he proclaimed a national goal of doubling exports by 2014.

One obvious way to increase exports is through free-trade agreements. But unions don't like them. No surprise then that for two years Obama has been sitting on three free-trade agreements – with Colombia, Panama and South Korea – already negotiated by his predecessor.

Under the pressure of dire economic conditions and of the consequences of stiffing three valued allies, Obama appeared ready to relent – only to put up a last-minute roadblock. He's demanding an expansion of Trade Adjustment Assistance – taxpayer money (beyond unemployment compensation) given to workers displaced by foreign competition, something denied to Americans rendered unemployed by domestic competition. It's an idea of dubious fairness but nicely designed to hold up ratification, while placing blame on Republican heartlessness rather than on political sabotage by Democrats beholden to unions for the millions they pour into Democratic coffers.

He continues:

Nothing new here. In 2009, Obama pushed through a federally run, questionably legal, bankruptcy for the auto companies that robbed first-in-line creditors in order to bail out the United Auto Workers. Elsewhere, Delta Air Lines workers have voted four times to reject unionization. A federal agency, naturally, is investigating and, notes economist Irwin Stelzer, can order still another election in the hope that it yields the answer Obama's campaign team wants.

But Democratic fealty to unions does not stop there. Boeing has just completed a production facility in South Carolina for its new 787 Dreamliner. The National Labor Relations Board, stacked with Democrats – including one former union lawyer considered so partisan that he required a recess appointment after the Senate refused to confirm him – is trying to get the plant declared illegal. Why? Because by choosing right-to-work South Carolina, Boeing is accused of retaliating against its unionized Washington state workers for previous strikes.

In fact, Boeing has increased unionized employment by more than 2,000 at its Puget Sound plant. Moreover, the idea that a company in a unionized state can thus be prohibited from expanding into right-to-work states by a partisan regulatory body is quite insane. It violates the fundamental principle in a free-market economy that companies can move and build in response to market conditions, rather than administrative fiat. It jeopardizes the economic recovery, not only targeting America's single largest exporter in its attempt to compete with Airbus for a huge global market, but also threatening any other company that might think of expanding in any way displeasing to unions and their NLRB patrons.

Krauthammer goes on to note the ruling handed down by the WI State Supreme Court, which upheld Scott Walker's "anti-Union" legislation and gave a much-needed black eye to activist judges everywhere.

The Wisconsin maneuver ultimately failed, as likely will the assault on Boeing. In the interim, however, there is collateral damage – to U.S. exports, to the larger economy, to bankruptcy law, to free trade, to a constitutional system wherein the legislatures make the laws, rather than willful judges and partisan regulators.

But what are those when there are unions to appease and elections to win?

Both parties "pay off" supporters and lobbyists when once they've obtained power.  The question is not whether pay-offs should or should not exist, but who is being paid off and is it helping this country.  We're all entitled to petition those we lend power to for whatever grievances we may have.

If a group of private citizens raises money and support for a politician who promises them that he will lower taxes across the board, and that politician gets elected and follows through on his promise, then I, for one, am glad that there was a pay-off involved.  But if the group that raises money and support for a politician then demands higher wages, more health care, less hours, and the ability to strike whenever they want more of those things - well, then, I'll pass on that.

But getting back to the whole "shovel-ready jobs" question: what's so wrong about them?  Isn't is smart to "re-invest" in infrastructure?

Funny I should ask.  The second crippling piece I came across this week is from the mind of Jonah Goldberg over at National Review.

In a New York Times Magazine profile last October, the president admitted he had to learn the hard way that there’s “no such thing as shovel-ready projects.”

This is a staggering indictment of the president, the team he assembled, and the journalists who accepted this administration’s arrogant assertions that they knew exactly what to do, how to do it, and what would happen as a result. Remember, this is the administration that to this day insists it is “pragmatic” and simply cares about “what works.”

“I think we can get a lot of work done fast,” President-elect Obama said shortly after a gathering of governors in December 2008. “All of them have projects that are shovel-ready, that are going to require us to get the money out the door.”

Jared Bernstein, economic adviser to Vice President Joe Biden — the White House’s point man on the stimulus — said in a cable-news interview in February 2009: “I think what people need to understand is that this really isn’t rocket science.” Spend a bundle on public works projects and — boom — you get a lot of people working.

They were wrong.

They were wrong not just about the effect of infrastructure spending — even an analysis by the Associated Press found no evidence unemployment was significantly improved by the Recovery Act’s public-works projects — but they were wrong about the existence of shovel-ready jobs in the first place. (They were also misleading, since only a tiny, tiny fraction of the stimulus went to any infrastructure at all. The bulk went to social programs.)

He continues:

But progressive liberals were the ones who were blinded by ideology. One need not be an ideologue to understand that public-works contracting has become bloated and inefficient. Indeed, one must be an ideologue of a certain kind not to understand that. Or one has to be incredibly naive. Or both.

Perhaps that’s why Obama’s real economic agenda never changed to fit the economic crisis. During the campaign he promised to reform health care and fight for a green economy. After the financial crisis, the “pragmatist” stuck to his outdated agenda, saying — surprise! — what the economy needs is the same agenda he promised before. So while he kept saying he was obsessed with job creation, he spent all of his political capital on health-care reform and energy. All the while, the White House tries to spin its agenda as something it’s not.

Good stuff, no?

The heart of the problem for liberal Democrats is their ideology.  President Obama is failing because he is doing what he said he would do (had more listened to his actual words during the 2008 campaign...or read his two autobiographies).

The simplest way to say it is this: the private sector is the only sector that can create jobs and can create wealth.  The public sector (i.e. our government) can only re-distribute wealth and hand out favors (on the taxpayer's dime) to the people that put them into office.

It's a ponzi scheme.  At best.

Good Intentions with Walter E. Williams

Dr. Walter E. Williams is a professor of economics at George Mason University and happens to be a black libertarian.  He is probably most well known from the numerous times he has filled in for Rush Limbaugh on his nationally syndicated talk show, but for thirty years now, Dr. Williams has been speaking and writing publicly on the issue of poverty and its causes.

In 1985, as part of Dr. Milton Friedman's "Free to Choose" franchise, Williams put together this extremely important and insightful documentary on the "Good Intentions" of poverty relief run by the federal government.

This is the stuff you don't learn in public schools. We need to have a heart for the poor, but if don't have a head for them as well, more harm than good befalls them.

PLEASE watch this video (all three parts)!

Sowell: Americans are “slaves to words”

Few people can dissect the passing cultural, political and economic scene quite like Dr. Thomas Sowell.

I'd get sick of citing his work if he ever got sick of penning the most lucid, discerning columns in America.  His effort this week focuses on the problem most Americans have when it comes to being able to look past the lofty (but utterly empty) rhetoric of politicians and pundits.

We could definitely use another Abraham Lincoln to emancipate us all from being slaves to words. In the midst of a historic financial crisis of unprecedented government spending, and a national debt that outstrips even the debt accumulated by the reckless government spending of previous administration, we are still enthralled by words and ignoring realities.

President Barack Obama's constant talk about "millionaires and billionaires" needing to pay higher taxes would be a bad joke, if the consequences were not so serious. Even if the income tax rate were raised to 100 percent on millionaires and billionaires, it would still not cover the trillions of dollars the government is spending.

More fundamentally, tax rates-- whatever they are-- are just words on paper. Only the hard cash that comes in can cover government spending. History has shown repeatedly, under administrations of both political parties, that there is no automatic correlation between tax rates and tax revenues.

Dr. Sowell continues:

When the tax rate on the highest incomes was 73 percent in 1921, that brought in less tax revenue than after the tax rate was cut to 24 percent in 1925. Why? Because high tax rates that people don't actually pay do not bring in as much hard cash as lower tax rates that they do pay. That's not rocket science.

Then and now, people with the highest incomes have had the greatest flexibility as to where they will put their money. Buying tax-exempt bonds is just one of the many ways that "millionaires and billionaires" avoid paying hard cash to the government, no matter how high the tax rates go.

Most working people don't have the same options. Their taxes have been taken out of their paychecks before they get them.

Rich people need an incentive to put their money back into the economy.  At the heart of the Left's weak-spot on this issue is the categorically false assumption that wealthy people owe it to the rest of us to use their capital for society's benefit.  They don't have to do anything with it.  They can bury it in the back yard, stash it in their freezer, or, if we play our legislative cards right, they can be presented with an incentive to re-invest their dough back into the economy.  The Left fails to grasp this, and when they are control the purse strings and tax rates of the nation, we all suffer for it.

Back in the 1920s, Secretary of the Treasury Andrew Mellon pointed out that people with high incomes were simply not paying the high tax rates that existed on paper, because they were putting their money into tax shelters.

After the tax rates were cut, as Mellon advocated, investments flowed back into the private economy, producing higher output, rising incomes, more tax revenue and more jobs. The annual unemployment rate in the next four years never exceeded 4.2 percent, and in one year was as low as 1.8 percent.

Despite political demagoguery about "tax cuts for the rich," in human terms the rich have less at stake than working people. Precisely because the rich have so many ways of avoiding taxes, a high tax rate is likely to do them far less harm than it does to the economy, on which millions of people depend for jobs.

If Americans began to refuse to envy those with more and refused to cease helping (and giving to) those with less, our financial woes and all of the sickening class warfare would end.  To afford and (somewhat) sustain the collectivist dreams of progressive liberals you need Christian birthrates, a Protestant work ethic, and free market enterprise.

But what if our "collective" goal became once more to promote liberty, an entrepreneurial spirit, personal responsibility, and civic duty instead?  We wouldn't need to over-tax any group of people and progressive liberalism would go gently into that good night it belongs.