Republicans must show the American people a credible, concrete plan to reduce government taxes and spending, resolve the entitlement crisis and cut the national debt, reinvigorate Main Street and entrepreneurial free enterprise, repeal and replace Obamacare, control our borders, and much else. If they don't, little will change in Washington except that Republicans will then share even more of the blame with Obama and the Democrats for the disaster in the nation's capital.
Glenn Beck's "Restoring Honor" rally held at the Lincoln Memorial inspired an estimated 300,000 people from across the country to come to Washington. Attendees donated slightly more than $5 million for the Special Operations Warrior Foundation. Despite the distinctly spiritual overtones to the event, however, much of the coverage focused on opposition expressed by speakers and attendees to President Obama's political and economic agenda. But the most important message from this event was likely aimed at congressional Republicans and it was anything but otherworldly: The voters are watching and they aren't going to settle for mere promises.
The GOP must remember that the Tea Party movement started barely a month into Obama's term, mere days following the passage of the $862 billion economic stimulus package. The protests were sparked in great part by CNBC's Rick Santelli with his on-air protest of Washington's growing list of taxpayer-funded bailouts of politically connected corporations such as insurance giant AIG. As he stood on the trading floor of the Chicago Stock Exchange, Santelli called for a "Chicago Tea Party," which elicited a cheer from the traders and resolve by citizen activists across the country. But the movement was not then and is not today simply a response to Obama: It's a bipartisan protest that includes dismay over the bailouts of President George W. Bush and the big spending by the Republican congressional majority before 2006.
With the 2010 midterm congressional elections barely two months away, the GOP is heavily promoting its "America Speaking Out" listening tour. But the Republican leadership has yet to come forward with a definitive plan for governing if voters return them to the majority in either the House or Senate, or both. The Examiner is told such a plan is coming in late September. The sooner, the better: The party's future depends on it. So far there are only tiny green shoots here and there now, like pledges to put cameras in House Rules Committee meetings and provide a 72-hour period for the public to read the final version of a bill before the House votes on it.
Politico reports that Minority Leader John Boehner has also pledged a GOP majority would ban "omnibus" spending bills and ego-boosting, tax-funded projects named after living lawmakers. These are important but small advances in the war on Big Government. Boehner can promise to change the way Congress legislates, but Republicans must show the American people a credible, concrete plan to reduce government taxes and spending, resolve the entitlement crisis and cut the national debt, reinvigorate Main Street and entrepreneurial free enterprise, repeal and replace Obamacare, control our borders, and much else. If they don't, little will change in Washington except that Republicans will then share even more of the blame with Obama and the Democrats for the disaster in the nation's capital.
President Obama is playing “Watch the Birdie” with Americans over the age of 50, diverting their attention with handouts and scare tactics to hide in plain sight the enormous damage his policies are doing to the retirement safety net. Now he is coming after Social Security.
President Obama is playing “Watch the Birdie” with Americans over the age of 50, diverting their attention with handouts and scare tactics to hide in plain sight the enormous damage his policies are doing to the retirement safety net.
First it was Medicare. The ObamaCare legislation drops a few free goodies like breadcrumbs in front of Medicare recipients (such as free diagnostics and annual checkups) to draw their attention away from the enormous cuts in Medicare being used to help pay the freight for the new national healthcare system. Additionally, the White House has engineered a full-blown propaganda campaign, coordinated with the AARP, to deceive Medicare recipients and baby boomers about the magnitude and the implications of the $575 billion in Medicare cuts being used to help pay for ObamaCare. Even more deceitfully, using TV icon Andy Griffith in a taxpayer-funded TV ad to talk about how happy days are here again, the Obama Administration and its mouthpiece AARP are attempting to hoodwink people over the age of 50 about the inherent healthcare rationing sown into the very fabric of ObamaCare.
Medicare’s own Chief Actuary has already publicly reported that the Medicare payment rates for the doctors and hospitals serving retirees will be cut by 30 percent during the next three years. The details buried in the Medicare Trustees report reveal that still further Medicare cuts adopted in the ObamaCare legislation add up altogether to $818 billion during the first 10 years of full implementation, and $3.223 trillion during the first 20 years, just for Medicare’s hospital program (Part A, HI). Counting the cuts for Medicare physician reimbursement under the Part-B program brings the grand total in Medicare cuts to $1.048 trillion during the first full 10 years, and $4.95 trillion during the first 20 years.
Now the president is coming after Social Security.
In his Saturday radio address on August 14, President Obama revealed he is already moving on to cut Social Security.
But again, he is playing "Watch the Birdie," this time using scare tactics rather than sweeteners.
In that address, he denounced the idea of solving Social Security’s problems by allowing young workers the freedom to voluntarily choose to save and invest some of their taxes in their own personal retirement accounts, an option federal employees already enjoy. The president rejects fixing the Bernie-Madoff Ponzi scheme currently used to finance Social Security with some form of personal accounts to begin pre-funding Social Security with real saving and investment. Instead, he rails about “privatization,” an incendiary (and false) characterization of voluntary personal retirement accounts intended to scare the bejeebers out of the American people.
"President Obama thinks Americans over the age of 50 are stupid and can be demagogued with false claims about their benefits."
President Obama knows that all these account proposals affect only younger workers and do not touch the benefits of today’s retirees or the baby boom generation soon to retire. Moreover, congressional proposals for voluntary personal accounts have maintained the safety net of Social Security, guaranteeing that workers would get at least as much as Social Security promises now.
But President Obama thinks Americans over the age of 50 are stupid and can be demagogued with false claims about their benefits. The far-left faction in the Democratic Party just can’t stand the idea of workers and retirees supporting themselves more through the private sector. They call that “privatization,” which means too much filthy capitalism for their tastes.
So the question remains: What is the president up to?
How does he propose to solve Social Security’s long-term financial crisis, which even his own Presidential Debt Commission realizes is real? Without some form of real saving and investment for workers to begin prefunding their retirement, the only alternatives remaining are to raise payroll taxes or cut benefits—and that is precisely what President Obama’s Debt Commission is planning.
One might think raising payroll taxes is out because President Obama pledged over and over to get elected that he would not raise taxes on anyone making less than $250,000 a year. If he refuses even to consider personal accounts as inconsistent with his socialist ideology, he will never be able to deliver on that promise.
As to benefit cuts, this is exactly what the Presidential Debt Commission is plotting to reveal right after the November election. Former Sen. Alan Simpson, co-chairman of the Commission, tipped the Commission’s hand recently when he described Social Security as a “milk cow with 300 million tits.”
Leaks indicate that among the options being considered are delaying the retirement age (sounds like a panacea to bureaucratic pencil pushers who never did a day of hard labor in their lives), changing the basic benefit formula to reduce future benefits, and delaying or slashing COLAs.
Apparently, President Obama’s concept of spreading the wealth includes sacking both the Medicare and Social Security systems on which America’s retirees have come to rely. That’s some progressive vision of “fiscal responsibility:” Put seniors out in the cold and into an early grave.
Washington has become little more than a sugar daddy to the states, handing out money for a whole range of needs -- health care, welfare, highways and other infrastructure needs, education, environmental concerns, and most recently bail out dollars. Ironically, the states' embrace of the handouts comes at a time when many of them are trying to reassert their rights and independence under the Tenth Amendment of the U.S. Constitution. They want Washington to quite bossing them around, even as governors plead for more federal assistance. The two can't co-exist. Can States Break the Cycle of Dependency?
President Lyndon Johnson's "War on Poverty" taught us what happens when well-meaning (to give them benefit of the doubt) politicians and bureaucrats create a welfare system that rewards those who shun work, while punishing those who try to take responsibility for themselves. Those perverse incentives create a cycle of welfare dependency that grips the poor and their offspring for decades.
So why don't we recognize that the same system, when directed at states rather than people, will also create a state cycle of dependency?
Washington has become little more than a sugar daddy to the states, handing out money for a whole range of needs -- health care, welfare, highways and other infrastructure needs, education, environmental concerns, and most recently bail out dollars. But those funds come with strings -- strings that give the feds indirect control over state policies.
For years the states were willing to embrace their sugar daddy to get the funds and accepted the conditions ... until recently. When President Obama came bearing stimulus funds, a handful of states-South Carolina, Texas, Mississippi and Louisiana -- pushed back, at least against part of the funds. Some were concerned that new federally imposed mandates on unemployment benefits would eventually cost the state more than it was receiving.
Now Washington has passed a $26 billion handout to the states for education and unemployment, and states are thrilled.
Ironically, the states' embrace of the handouts comes at a time when many of them are trying to reassert their rights and independence under the Tenth Amendment of the U.S. Constitution. They want Washington to quite bossing them around, even as governors plead for more federal assistance. The two can't co-exist.
It would take tremendous political courage at the state level, but we'd love to see a movement from the state legislatures that summarily rejected federal handouts, including the matching grants for Medicaid recipients.
Step up, states, and break that cycle of dependency.
And if Congress weren't handing money back to the states, it wouldn't need to extract those funds from taxpayers in the states. Less money from taxpayers and more independence for the states; a win-win for the states and the taxpayers.
The Department of Health and Human Services (HHS) last month unveiled a slick, $700,000 television commercial featuring crusty old actor Andy Griffith announcing that "more good things" are coming to seniors - thanks to Obamacare. Just add the O Force campaign logo, and the advertisement will be ready for use in the 2012 presidential race.
The O Force taps public funds for propaganda campaign
This undated handout video image provided by Medicare.gov shows actor Andy Griffith in a new role: pitching President Obama's health care law to seniors, in a cable television ad paid for by Medicare.
In the modern era, all presidents have to some degree used their office to promote themselves and their policies. The Obama administration, however, has taken the practice to new heights. The Department of Health and Human Services (HHS) last month unveiled a slick, $700,000 television commercial featuring crusty old actor Andy Griffith announcing that "more good things" are coming to seniors - thanks to Obamacare. Just add the O Force campaign logo, and the advertisement will be ready for use in the 2012 presidential race.
That has worried Rep. Darrell Issa, California Republican, who last week issued a report that called into question the legality of the administration's harnessing of government resources to advance a political agenda. The report describes how HHS last year slipped $392,600 in taxpayer funds to MIT economist Jonathan Gruber for "technical assistance" in formulating aspects of Obamacare. Without disclosing his place on the HHS dole, Mr. Gruber provided glowing commentary in support of Obamacare to outlets such as The Washington Post and New York Times. In January, the Gray Lady pointed out that Mr. Gruber had a contractual obligation to inform it about his conflict of interest, adding a disclaimer to his column online explaining, "Had editors been aware of Professor Gruber's government ties, the Op-Ed page would have insisted on disclosure or not published his article."
The deception was not aimed at just the biggest of old-media outlets. Even small online blogs and forums enjoyed the attention of presidential appointees practicing sock puppetry to create the false appearance of grass-roots support for administration policies. In 2008, the Justice Department tapped Tracy Russo, a former member of the John Edwards for President campaign team, to direct new media efforts. According to Mr. Issa's report, Ms. Russo attempted in this role "to shape public opinion by searching online for articles, blogs or other entries critical of the Administration and then anonymously, or through the use of a pseudonym, posting comments to those sites attacking the author or contents." Failure to disclose her government ties in this endeavor appears to run afoul of legal prohibitions against "covert propaganda."
The Obama administration denies any wrongdoing while, at the same time, it refuses to hand over the information that Mr. Issa has requested in his role as the Oversight and Government Reform Committee's ranking member. "The administration doesn't deserve the benefit of doubt on this, and we don't have the subpoena power necessary to make them provide this information," Frederick Hill, communications director for the committee's minority staff, told The Washington Times.
That could change in November. Should voters hand Mr. Issa the committee's gavel, along with its power of subpoena, there is little doubt he could find out just how far over the line the presidential propaganda effort has gone.
You’ve probably seen the television ads featuring Andy Griffith extolling the virtues of Medicare. But Social Security Institute President Dr. Larry Hunter says the ad is a lie and the Obama administration and the AARP are using Griffith to lie to seniors and to distract them. So what are they distracting seniors from hearing? How is Andy Griffith a major tool in getting seniors to ignore major cuts in Medicare? And what’s the truth? We asked Dr. Hunter.
You’ve probably seen the television ads featuring Andy Griffith extolling the virtues of Medicare. But Social Security Institute President Dr. Larry Hunter says the ad is a lie and the Obama administration and the AARP are using Griffith to lie to seniors and to distract them. So what are they distracting seniors from hearing? How is Andy Griffith a major tool in getting seniors to ignore major cuts in Medicare? And what’s the truth? We ask Dr. Hunter.
Dr. Hunter.
I would be very interested in your opinion on the plan to seize 401(k)s an IRAs.
Bloomberg Jan 8, 2010 & Human Events by Connie's Congress 05/04 2010.
I now live off my large IRA an planned to go outside this country for health care.
The plan is to take our per taxed money an make us take a gov. annuity.
This keeps me up at night. This will Kill me faster then the you are to old an you get no health care plan they now have. Karen Ross, widowed no children
The 21st century will not be dominated by America or China, Brazil or India, but by the city. In an age that appears increasingly unmanageable, cities rather than states are becoming the islands of governance on which the future world order will be built. This new world is not -- and will not be -- one global village, so much as a network of different ones.
Originally Posted At Foreign Policy By Parag Khanna September/October 2010
Beyond City Limits
The age of nations is over. The new urban age has begun.
The 21st century will not be dominated by America or China, Brazil or India, but by the city. In an age that appears increasingly unmanageable, cities rather than states are becoming the islands of governance on which the future world order will be built. This new world is not -- and will not be -- one global village, so much as a network of different ones.
Time, technology, and population growth have massively accelerated the advent of this new urbanized era. Already, more than half the world lives in cities, and the percentage is growing rapidly. But just 100 cities account for 30 percent of the world's economy, and almost all its innovation. Many are world capitals that have evolved and adapted through centuries of dominance: London, New York, Paris. New York City's economy alone is larger than 46 of sub-Saharan Africa's economies combined. Hong Kong receives more tourists annually than all of India. These cities are the engines of globalization, and their enduring vibrancy lies in money, knowledge, and stability. They are today's true Global Cities.
At the same time, a new category of megacities is emerging around the world, dwarfing anything that has come before. A massive influx of people has not only spurred the growth of existing cities, but created new ones virtually from scratch on a scale not previously imagined, from the factory towns in China's Guangdong province to the artificial "knowledge cities" rising in the Arabian desert. The defining feature of this new urban age will be megalopolises whose populations are measured in the tens of millions, with jagged skylines that stretch as far as the eye can see.
Many will pose challenges to the countries that give birth to them. For though no nation can succeed without at least one thriving urban anchor -- and even then, a functioning Kabul or Sarajevo is still no guarantee of national survival -- it's also true that globalization allows major cities to pull away from their home states, a reality captured by the massive and potentially dangerous wealth gap between city and countryside in second-world countries such as Brazil, China, India, and Turkey.
Neither 19th-century balance-of-power politics nor 20th-century power blocs are useful in understanding this new world. Instead, we have to look back nearly a thousand years, to the medieval age in which cities such as Cairo and Hangzhou were the centers of global gravity, expanding their influence confidently outward in a borderless world. When Marco Polo set forth from Venice along the emergent Silk Road, he extolled the virtues not of empires, but of the cities that made them great. He admired the vineyards of Kashgar and the material abundance of Xi'an, and even foretold -- correctly -- that no one would believe his account of Chengdu's merchant wealth. It's worth remembering that only in Europe were the Middle Ages dark -- they were the apogee of Arab, Muslim, and Chinese glory.
Now as then, cities are the real magnets of economies, the innovators of politics, and, increasingly, the drivers of diplomacy. Those that aren't capitals act like they are. Foreign policy seems to take place even among cities within the same country, whether it's New York and Washington feuding over financial regulation or Dubai and Abu Dhabi vying for leadership of the United Arab Emirates. This new world of cities won't obey the same rules as the old compact of nations; they will write their own opportunistic codes of conduct, animated by the need for efficiency, connectivity, and security above all else.
Western cities have dominated the ranks of leading urban centers since the Industrial Revolution, a testament to their educated workforces, strong legal systems, risk-taking entrepreneurs, and leading financial markets. New York and London together still represent 40 percent of global market capitalization. But look at the economic map today, and a major shift becomes apparent. Asia-Pacific financial hubs such as Hong Kong, Seoul, Shanghai, Sydney, and Tokyo are leveraging globalization to spur an accelerating Asianization. Money floods into these capitals from around the world but tends to stay within Asia. An Asian monetary fund now provides stability for the region's currencies, and trade within the Asian sphere has grown much larger than trade across the Pacific. Instead of long-haul flights, the story here is of low-cost carriers connecting planeloads of travelers from Ulan Bator to Kuala Lumpur to Melbourne.
Accelerating this shift toward new regional centers of gravity are port cities and entrepôts such as Dubai, the Venices of the 21st century: "free zones" where products are efficiently re-exported without the hassles of government red tape. Dubai's recent real-estate overreach notwithstanding, emerging city-states along the Persian Gulf are investing at breakneck speed in efficient downtown business districts, offering fast service and tax incentives to relocate. Look for them to use sovereign wealth funds to acquire the latest technology from the West, buy up tracts of agricultural land in Africa to grow their food, and protect their investments through private armies and intelligence services.
Alliances of these agile cities are already forming, reminiscent of that trading and military powerhouse of the late Middle Ages, the Hanseatic League along the Baltic Sea. Already, Hamburg and Dubai have forged a partnership to boost shipping links and life-sciences research, while Abu Dhabi and Singapore have developed into a new commercial axis. No one is waiting for permission from Washington to make deals. New pairings among global cities follow the markets: Witness the new Doha to Sao Paulo direct flight on Qatar Airways or the Buenos Aires to Johannesburg route on South African Airways. When traffic between New York and Dubai dried up due to the financial crisis, Emirates airlines rerouted its sleek Airbus A380 planes to Toronto, whose banking system survived the economic shake-up in better shape.
For these emerging global hubs, modernization does not equal Westernization. Asia's rising powers sell the West toys and oil and purchase world-class architecture and engineering in return. Western values like freedom of speech and religion are not part of the bargain.
This is very much the case in the monarchies of the Persian Gulf, where urban ambition is manifest in iconic new districts ordered up in the desert sands. Abu Dhabi is creating the solar-powered, car-free Masdar City -- meant to be the world's first carbon-neutral, no-waste city -- and colonizing its Saadiyat Island with architectural marvels to house new Guggenheim and Louvre collections in stunning new buildings by Frank Gehry and Jean Nouvel. The emirate has embraced a two-decade master plan to invest not only in new cities, but in smart ones that will take into account land use, sanitation, efficient transport, and community building, in hopes of making itself into a place where Westerners will flock for a better quality of life (certainly not because of the climate or its starring role in Sex and the City 2). Already the result in the Persian Gulf is something truly new, as a once-barren cultural zone features increasingly global melting pots like the Qatari capital of Doha, where residents hail from more than 150 countries and far outnumber the locals. If these new five-star hubs play it right, they could convince Westerners to give up their citizenship for permanent homes in a friendlier, tax-free environment.
Then there are the megacities, superpopulous urban zones that are worlds unto themselves but that -- for now -- still punch below their weight class economically: Think Lagos, Manila, or Mexico City. When Tokyo in 1980 became the first metropolitan area to reach a population of 20 million, the figure seemed almost unimaginable. Now we need to get used to the idea of nearly 100 million people clustered around Mumbai or Shanghai. Across India, more than 275 million people are projected to move into the country's teeming cities over the next two decades, a population nearly equivalent to that of the United States. During a recent trip to Jakarta, a minibus-clogged megalopolis of 24 million, it struck me that many if not most of the residents will never leave their city's expanding perimeter or know much of the outside world beyond the airplanes flying overhead. In just a few decades, Cairo's urban development has stretched so far from the city's core that it now encroaches directly on the pyramids 14 miles away, making them and the Sphinx commensurately less exotic than when my father was photographed there in the 1970s, with just the pyramids and a camel in view.
The millions of urban squatters pouring into megacities each year are not simply a new global migrant underclass, consigned to live in chaos and work in the shadow economy. Instead, they often form functional, self-organizing ecosystems that are "off the grid." But one result is an echo of the physical stratification of medieval cities; where knights and walls once protected the aristocracy from unwanted outsiders, now electrified gates and private security agencies do the same. Gurgaon, not long ago a sleepy farming village outside New Delhi, has become a high-rise, high-tech satellite of more than half a million people and was recently ranked India's best city to work in. It offers gated complexes, such as Windsor Court, with their own grocery stores, kindergartens, and social clubs all in one compound so that only working husbands ever have to face the real world of India's choking traffic and noxious pollution.
Indeed, economic inequality flourishes in these massive new urban clusters. Consider the skylines of Istanbul, Mumbai, and Sao Paulo, where stunning high-rises are surrounded by ungodly scenes of destitution and squalor. Indian billionaire Mukesh Ambani, the world's fourth-richest person, is reportedly spending close to $2 billion on the construction of his 27-story home -- complete with hanging gardens, a health center, and helipads -- all with a bird's-eye view of Mumbai's largest slum, Dharavi. Once, while jogging on a treadmill on the top floor of a Sao Paulo hotel, I tried to count the many helicopters buzzing by. The city has the highest rate of private helicopter use in the world -- a literal sign of what heights people will go to in order to avoid the realities of the world below.
Look at a satellite image of the Earth at night: It will reveal the shimmering lights of cities flickering below, but also an ominous pattern. Cities are spreading like a cancer on the planet's body. Zoom in and you can see good cells and bad cells at war for control. In Caracas, gang murders and kidnappings are a fact of life, and al Qaeda terrorists hide in plain sight in Karachi. Film director Shekhar Kapur is working on an epic titled Water Wars: It is set not in parched Africa or the fractious Middle East, but Mumbai. Anyone who traveled to South Africa for the 2010 World Cup might have noticed how private security forces outnumbered official police two to one, and gated communities protected elites from the vast townships where crime is rampant. Cities -- not so-called failed states like Afghanistan and Somalia -- are the true daily test of whether we can build a better future or are heading toward a dystopian nightmare.
Taken together, the advent of global hubs and megacities forces us to rethink whether state sovereignty or economic might is the new prerequisite for participating in global diplomacy. The answer is of course both, but while sovereignty is eroding and shifting, cities are now competing for global influence alongside states.
Columbia University scholar Saskia Sassen has done the most to contribute to our thinking about how urban advantage translates into grand strategy. As she writes in The Global City, such places are uniquely suited to translate their productive power into "the practice of global control." Her academic work has traced how Europe's largely autonomous Renaissance cities such as Bruges and Antwerp innovated the legal frameworks that enabled the first transnational stock exchanges, setting the stage for international credit and the forerunners of today's trading networks. Then as now, nations and empires did not restrain cities; they were merely filters for cities' global ambitions. The supply chains and capital flows linking global cities today have similarly denationalized international relations. As Sassen argues, in cities we can't make trite divisions between the government and private sector; either they work together or the city doesn't work at all. Even massive national investments in telecommunications or other infrastructure don't equalize the balance of power between cities and the rest; they ultimately reinforce the power of cities to conduct their own "sovereign" diplomacy.
Consider how aggressively Chinese cities have now begun to bypass Beijing as they send delegates en masse to conferences and fairs where they can attract foreign investment. By 2025, China is expected to have 15 supercities with an average population of 25 million (Europe will have none). Many will try to emulate Hong Kong, which though once again a Chinese city rather than a British protectorate, still largely defines itself through its differences with the mainland. What if all China's supercities start acting that way? Or what if other areas of the country begin to demand the same privileges as Dalian, the northeastern tech center that has become among China's most liberal enclaves? Will Beijing really run China then? Or will we return to a fuzzier modern version of the "Warring States" period of Chinese history, in which many poles of power competed in ever-shifting alliances?
Think about it: Even today's most centralized empire-state could be undone by its cities. Gone are the days of Mao when peasant uprisings could collectively capture the nation. Today, controlling the cities, not the countryside, is the key to the Middle Kingdom. The same is very much the case in Africa's fragile post-colonial nations. Africa's urbanization rate is approaching China's, and the continent already has nearly as many cities with a population of 1 million or more as Europe does. But decades of despotism and civil wars haven't yielded governments that can hold together entire countries -- let alone Africa's two geographically largest nations, Sudan and the Democratic Republic of the Congo. Instead, these countries seem to be headed toward division, with the new borders following and surrounding the main cities that are their gravity points, like Juba in South Sudan and Kinshasa in Congo. Or perhaps borders don't need to change at all, but rather melt away, so long as locals have access to the nearest big city no matter what "country" it is in. This is, after all, how things really work on the ground, even if our maps don't always reflect this reality.
As our world order comes to be built on cities and their economies rather than nations and their armies, the United Nations becomes even more inadequate as a symbol of universal membership in our global polity. Another model could be built on the much less rigid World Economic Forum of Davos fame, which brings together anyone who's someone: prime ministers, governors, mayors, CEOs, heads of NGOs, labor union chiefs, prominent academics, and influential celebrities. Each of these players knows better than to rely on some ethereal "system" to provide global stability -- they move around obstacles and do what works.
The scope of urban ambition today ranges from new business districts to special economic zones to entirely new cities never before on the map. Sitting down recently at a construction site on the banks of the Elbe River, I spoke with Jürgen Bruns-Berentelg, CEO of Hamburg's bold new HafenCity project. A veteran of Berlin's futuristically redesigned Potsdamer Platz, he has resuscitated Hamburg's neglected industrial waterfront and turned it into an efficient, job- and family-friendly island, seamlessly integrated into this revitalized German city. "We've moved from arbitrary to curated urban design," he told me confidently. Just as Hamburg was once a powerful trading linchpin of the medieval Hanseatic League because of its proximity to the Baltic Sea, HafenCity's ample new port terminals look to capitalize on changing trade patterns to capture a larger slice of the massive global shipping market. But HafenCity is also designed to house 21st-century industries. Global companies such as Procter & Gamble have moved their regional headquarters into buildings that are so ecoefficient that their toilets don't use water. "For both businesses and residents," Bruns-Berentelg pointed out, "moving to HafenCity is more than a rental decision -- it's a lifestyle choice." Officials from Rotterdam, Toronto, and other forward-thinking cities are coming to learn from HafenCity, whose residents are in a way the pioneers of urban renewal for the Western world, which doesn't have the luxury of building cities from scratch.
Africa, however, does -- and that's precisely what Stanford University economist Paul Romer is pushing. His "Charter Cities" initiative aims to help poor countries leapfrog into the urban age by embracing an idea much like charter schools: Set aside a plot of land, give it special administrative status and flexibility (as China did in leasing Hong Kong to Britain), and then step out of the way and let experts run it. Romer is in discussions with countries in Africa to find a candidate willing to provide the land for a pilot project; his plan has the potential to transform an entire country's fortunes. Whether or not his utopian and, to some, neocolonial dream goes anywhere, some places have already successfully experimented on their own: China's Guangdong province has had special economic zones for decades, meant to cut out hidebound bureaucracies in favor of business-friendly parastatal governance. Enclaves from King Abdullah Economic City in Saudi Arabia to Binh Duong in Vietnam are now copying the model.
Charter cities are a poor man's version of South Korea's $40 billion Songdo project, which promises to stand in a class of its own upon completion in 2015. Touted as the most expensive private development in history, Songdo is more than a new business district or economic zone; it will be the world's first sentient city, using advanced communications technologies to make life seamlessly interactive, from homes to schools to hospitals. Each wave of new residential and commercial blocks that comes on the market sells out almost instantly in connectivity-crazed South Korea. It also represents Asia's chance to turn its demographic concentration and burgeoning consumption from a threat to the planet into a model that can be re-exported to the developing world. The estimated 300 new cities that China alone has planned are a huge market opportunity for green developers like Gale International, which leads the Songdo project, to deploy ecofriendly city plans.
Indeed, Songdo might well be the most prominent signal that we can -- and perhaps must -- alter the design of life. Cities are where we are most actively experimenting with efforts to save the planet from ourselves. Former U.S. President Bill Clinton has brought together mayors from 40 large cities to build a network of best practices for reducing greenhouse gas emissions. Vertical farming, long in vogue in Tokyo, is spreading to New York; the electric mass-transit system of Curitiba in Brazil is being copied in North America; Cisco is embedding sensors in Madrid's traffic signals to make the city traffic-free. The consulting firm McKinsey recently estimated that if India pursues urbanization in an ecoefficient manner, it will not only make the country a healthier place, but add an estimated 1 to 1.5 percentage points to its GDP growth rate.
In this way, a world of cities can spark a cycle of virtuous competition. As geographer Jared Diamond has explained, Europe's centuries of fragmentation meant that its many cities competed to gain an edge in innovation -- and today they share those advances, making Europe the most technologically developed transnational zone on the planet.
What happens in our cities, simply put, matters more than what happens anywhere else. Cities are the world's experimental laboratories and thus a metaphor for an uncertain age. They are both the cancer and the foundation of our networked world, both virus and antibody. From climate change to poverty and inequality, cities are the problem -- and the solution. Getting cities right might mean the difference between a bright future filled with HafenCitys and Songdos -- and a world that looks more like the darkest corners of Karachi and Mumbai.
So now they want to send Roger Clemens to jail for lying to Congress. My question is when are they going to send Members of Congress and President Barack Obama to jail for lying to the American people?
So now they want to send Roger Clemens to jail for lying to Congress.
My question is when are they going to send Members of Congress to jail for lying, lying, lyingto the American people? When are they going to send President Barack Obama and the bureaucrats in his administration to jail for lying, lying, lying to the American people?
Remember, they sent Martha Stewart to jail for lying to agents of the federal government. Indeed, one of the charges against Martha Stewart was lying to the American public about the value of her company's stock. When are they going to start sending agents of the federal government to jail for lying to the American people, who supposedly are their bosses and pay their salaries?
Why not start by enacting an appropriate rendition of Title 18, Section 1001 of the United States Code, under which Martha Stewart was sent to jail, to make it a crime for any federal elected or appointed official, any federal employee or federal contractor to: "1) knowingly and willfully; 2) make any materially false, fictitious or fraudulent public or private statement or representation; 3) in any matter within the jurisdiction of the executive, legislative or judicial branch of the United States?" Oh, you say, applying such sweeping language to politicians and bureaucrats would make it impossible for "public servants" to do their job? How about the fact that the sweeping powers of the federal government to entrap, fine and incarcerate the American people make it increasingly impossible to live their lives?
In The United States, the People are supposed to be sovereign -- remember government OF the people, BY the people, FOR the people? But as it turns out, it’s the political functionaries—judges, legislators, executives and bureaucrats—who grant themselves sovereign immunity from any legal redress for abuse of power or lying. It's government OF the bureaucrats and politicians, BY the bureaucrats and politicians and FOR the bureaucrats and politicians. That must end.
Contempt of Congress can land you in the slammer for half a lifetime; contempt for the American people just gets you re-elected to Congress or a cushy life-time job in the federal bureaucracy. Welcome to Kafka’s Castle on the Potomac.
A federal grand jury has indicted former professional baseball pitcher Roger Clemens for allegedly lying to Congress during a congressional hearing about performance-enhancing drugs, a proceeding that was a travesty of justice and an abuse of congressional powers to begin with. If convicted on all charges, Clemens faces a combined maximum sentence of 30 years in prison and a $1.5 million fine. Oh, we do love to send people to prison in America today, especially for drugs.
The Courts have held that there is “no congressional power to expose for the sake of exposure” but that parchment pronouncement from the bench is meaningless in today’s world of unlimited congressional power to do whatever it damn well pleases.
Congress’s trying to force someone to incriminate themselves in an illegitimate fishing expedition (which could at best result in another gross over reach of congressional authority if the fishing expedition consummated in legislation) may seem to the average citizen to be beyond the bounds but not under the tortured interpretation of the U.S. Constitution that prevails today in America. Common sense and a faithful reading of the Constitution would lead one to believe that athletes’ abuse of performance-enhancing drugs is no concern of the U.S. Congress, and it is vastly overstepping its bounds setting up an inquisition to force people to testify before it about their personal use of such drugs. But neither common sense nor a faithful reading of the U.S. Constitution prevail in America today.
There is no provision in the U.S. Constitution that expressly authorizes either House of Congress to make investigations and exact testimony to assist it exercise its legislative powers. But beginning with the obscene expansion of federal power during the post-Civil-War Era—in a now familiar mutual back-scratching exercise by which one branch of the federal government expands the powers of another branch, rather than holding the other branches in check as the Founding Fathers intended—the Supreme Court held in Kilbourn v. Thompson that 1) Congress had the power to investigate in areas in which it was empowered to legislate, 2) dodged the question of whether Congress also had the power to compel testimony of private individuals in cases other than impeachment proceedings, but 3) found no congressional power to subpoena documents or hold a private person in contempt for refusing to produce documents. In the same decision however, in a tortured reading of the Constitution, the Court immunized Members of Congress from being sued or sent to jail for false imprisonment if they illegally imprisoned an individual who refused their request for documents because, in the Alice-in-Wonderland logic of the Court, the Members of Congress would simply be “exercising their official duties.” Their “duties” may be illegal under the Constitution but not to worry, the Court gave Members of Congress a free pass to commit criminal acts under the guise of “exercising their [illegal] official duties.” Wow!
With this crack in the door and the future expansion of federal powers beyond all constitutional bounds, Courts gradually over the years expanded the congressional power to compel testimony of private citizens as “an essential and appropriate auxiliary to the legislative function.”
In theory, the congressional power of investigation, inquiry and witness compulsion is not unlimited. In Kilbourn, the Court held that the power of congressional investigation may properly be employed “only in aid of the legislative function.”
Fine in theory; meaningless in practice.
In a later landmark decision (McGrain v. Daugherty) chipping away at Kilbourn’s rule—which held that neither house of Congress possesses a general power of making inquiry into the private affairs of the citizen and the investigatory power actually possessed by Congress is limited to inquiries relating to matters of which the particular House may legislate—the court discovered an implicit power of either House of Congress to hold a witness in a congressional investigation in Contempt for a refusal to honor its summons or to respond to its questions.
Given the power to compel witnesses to testify before Congress and to hold those witnesses in contempt, the theoretical limitation on Congress’s power to sit as a judicial star chamber was dust. The Court described an empty means by which to hold in check congressional power to investigate, compel witnesses, issue subpoenas, hold in contempt and rely upon federal prosecutors to manipulate federal grand juries into bringing bills of indictment for lying to Congress: “The outermost boundaries [of congressional investigatory powers] are marked, then, by the outermost boundaries of the power to legislate.” Which is to say in today’s world of unlimited congressional power in which no outermost boundaries of the power to legislate exist, there are no outermost boundaries to Congress’s power to intimidate witnesses and have them jailed by their executive-branch handmaidens in the so-called American System of Justice.
If this process sounds familiar, it should; it is exactly the same devious judicial process of making a narrow constitutional exception swallow the broad constitutional rule by which the Ninth and Tenth Amendments have effectively been read out of the U.S. Constitution. So, while many Republicans are in high dudgeon today over the breadth of the 14th Amendment, beside themselves to legislate much of the 14th Amendment out of existence, there really is no reason to do so. Give the Courts time and they will do it all by themselves and hand Congress vast new powers to lie to, steal from and incarcerate the American people. Welcome to America in the 21st century. Whatever Happened To Justice?
Everything that comes out of this administration, from its pronouncements on the overseas front to its own unemployment numbers, is a lie: it’s all lies, all the time. The farcical "withdrawal" from Iraq, which amounts to merely increasing the number of mercenaries in the region, is a complete fabrication, motivated by pure politics and an infinite faith in the cluelessness of the Average Joe, who is too busy looking for a job to care. As to what they’ll do when the insurgency starts to rise again, not to worry: no one will notice but the soldiers in the field. Surely the American media won’t be so rude as to point it out, unless the Green Zone goes up in flames and they have to evacuate stragglers by helicopter as they did in Vietnam. In that case, the visuals would be too good to pass up.
Originally Posted At AntiWar.com By Justin Raimondo August 20, 2010
Your tax dollars at work
I had to laugh when I saw the headline on Antiwar.com: "US Announces Second Fake End to Iraq War." Yes, I did indeed get a rush of déjà-vu as I listened to Keith Olbermann and Rachel Maddow solemnly describe "the end" of the "combat mission" in Iraq, and Richard Engel pontificate as the cameras zoomed in on the "last" convoy over the border to Kuwait. Occasionally, however, reality would intrude, as Rachel noted the broadcast could be interrupted at any time by a sudden attack, and there would be no time to explain to viewers what was happening. It was Olbermann who openly referred to Bush’s "Mission Accomplished" moment, and wondered if perhaps this wasn’t a re-run: I’ll bet he got in plenty of trouble for that little crack. As Engel interviewed a couple of disinterested looking grunts about their innermost thoughts at "this historic moment," I thought: from "shock and awe" to schlock and yawn.
This farcical "withdrawal," which amounts to merely increasing the number of mercenaries in the region, is a complete fabrication, motivated by pure politics and an infinite faith in the cluelessness of the Average Joe, who is too busy looking for a job to care. As to what they’ll do when the insurgency starts to rise again, not to worry: no one will notice but the soldiers in the field. Surely the American media won’t be so rude as to point it out, unless the Green Zone goes up in flames and they have to evacuate stragglers by helicopter as they did in Vietnam. In that case, the visuals would be too good to pass up.
Everything that comes out of this administration, from its pronouncements on the overseas front to its own unemployment numbers, is a lie: it’s all lies, all the time. Even in small matters, the default is a fib, such as in the case of the Pentagon’s denial that it was ever in touch with WikiLeaks about minimizing the alleged damage done by the next Afghanistan document dump. After all, why would WikiLeaks make up such a story? The feds just want the documents "expunged," thank you. I doubt they really believe it’s possible to "expunge" the Afghan war logs from the internet. If so, they are dumber than anyone has so far imagined. And so much for the myth that the Pentagon really cares about any danger to Afghan informants, who might be compromised by the release of more documents: Julian Assange and WikiLeaks have given them their chance to safeguard the identities of US collaborators, and the Pentagon flat out rejected it. So be it.
The feds hate WikiLeaks because they exposed the lies this administration has been putting out about how the war is going just fine: the true number of casualties, and the toll on innocent civilians, is online for all to see, and there’s more coming. Now, no one but the naïve and the bought-off expects government officials to tell the truth: no one is surprised to discover George Washington’s heirs did indeed cut down the cherry tree, and tried to cover it up. However, I’m old enough to be shocked by the "reporting" in the news media that takes this "the war is over" narrative seriously.
That’s why we keep getting into these wars – we don’t really have an independent media. When they aren’t cavorting with Rahm Emanuel on the beach, they’re in front of the cameras repeating the most outrageous lies with a straight face. This is a very big problem, because only an informed citizenry can check the power of government, especially in the foreign policy realm. If Americans don’t know what their own government is doing overseas, then there’s not much hope for a more peaceful foreign policy.
This journalistic vacuum is the reason for the rise of sites like WikiLeaks, and Antiwar.com. We have tried to fill it as best we can, but we are not a large operation: the real reporting that needs to be done can hardly be said to exist. The reason is that the Fourth Estate has simply become the handmaiden of the State – and they’re even, in these hard times, talking openly about receiving government subsidies. But haven’t they been on the take, in one form or another, for as long as anyone can remember? A government bailout of the news business would merely formalize a preexisting condition.
Speaking of liars, we don’t hear much from the neocons, these days, at least when it comes to Iraq. Keeping in mind their original scenario of a "domino effect" from the invasion spreading out over the entire region, with pro-American revolutions toppling Arab tyrannies left and right, it never happened: what did happen is that we got sucked down into the Iraqi sinkhole, and just barely managed to extricate ourselves with the remnants of our dignity intact.
So we are spared the cries of the neocons that the "revolution" has been "betrayed" by Obama. The party line is that the "surge" worked, and we won, although the shape of "victory" – a dysfunctional, violence-plagued, perpetually decomposing Iraq – isn’t anything close to their original vision of a "liberated" Middle East. So they can be for the fake "withdrawal," and, in any case, they’re just happy to have gotten away with their crimes in the first place, lying us into war with phony "intelligence," and killing hundreds of thousands of Iraqis as a blood sacrifice to the war god. "Mission accomplished," as they say.
NOTES IN THE MARGIN
Along with having no real media, we are burdened with an even more onerous condition: the complete absence of a real antiwar movement. Instead, we have periodic peace crawls dominated by various professional lefties whose main concern is not actually stopping the war but advancing their own little political agendas, whether it be freeing Mumia What’s-his-name, advancing the cause of "the workers," or whatever.
These people are living fossils seeking to reenact the best moments of their lives: the 1960s, when mass demonstrations against the Vietnam war forced the US government to withdraw. Back then, it was fashionable to be a commie, and the only question was what flavor: Maoist, Castroite/Guevarist, Third World Stalinist, or – for lovers of the exotic – Trotskyist. When the New Left crashed and burned, self-destructing in an orgy of sectarianism and violence, the fashionistas moved on to greener pastures and only a few remnants persisted. These were absorbed by the Old Left, whose hollowed-out organizations survive to this day, ghosts from the 1930s who haunt every antiwar conference and event, selling their little newspapers and arguing mostly among themselves.
One such sect is the quasi-Trotskyist group known as "Socialist Action," with whom I’ve conducted a not always very polite series of polemics: their latest riposte is an exercise in self-citation, in which the author quotes extensively from his own newspaper’s account of the debate, and merely summarizes the accusations of his comrades: I’m one of those terrible "right-wingers," whose intellectual history of the anti-interventionist movement features an introduction by none other than the sinister Pat Buchanan. Horrors! They fail to note, however, that this web site has been endorsed by Dan Ellsberg, perhaps because it doesn’t fit into their cramped left-right worldview. They point to my monthly column for Chronicles magazine, a voice of paleoconservatism, as proof of my wickedness, and yet I’ve also been published in Mother Jones magazine, and been lauded by Alex Cockburn. My agenda, they aver, is "anti-gay," which seems strange, when you think about, since I am gay. But never mind, because all this playground banter is really not the point: what I want to know is why Socialist Action is running away from their own political heritage.
The Socialist Action grouplet is one of the shards of the old Socialist Workers Party, which was once the main Trotskyist party in the US and the biggest in the world. During the 1960s, the SWPers were a force to be reckoned with within the antiwar movement, because they were, in large part, responsible for its enormous impact. This was due to their strategic focus, which was the construction of a single issue movement to end the Vietnam war. They fought every attempt by left-sectarians to hijack the movement and divert it from its central purpose, and often won: this laser-like focus made possible the truly massive nationwide antiwar protests, which eventually made prosecution of the war politically impossible.
In the 1980s, the SWP was taken over by a weirdo named Jack Barnes, who threw the "old Trotskyism" overboard, embraced Fidel Castro, and purged a good 40% of the membership, including the founders of Socialist Action. Although the party had managed to recruit a lot of new members from the antiwar movement, and other movements, the SWP withered soon after that, and dwindled into an insignificant cult.
Before that happened, however, I worked with the SWP in the San Francisco Bay Area as a member of Students for a Libertarian Society, in the campaign against the Briggs Initiative, a state referendum which, if it had passed, would have banned gay teachers from the public schools. The single-issue orientation was still in operation, and socialists and libertarians did some good and necessary political work defending our civil liberties against government intrusion. They sold their newspapers, and pushed their doctrine, and we pushed ours: the anti-Briggs coalition was a free market of competing ideologies, but we were united in action when it came to fighting Briggs.
What I want to know is this: why was this single-issue strategy of the Socialist Workers Party wrong? After all, most of the members of Socialist Action were SWP members at the time this strategy was carried out. Why was it good then, and bad today?
Far from "red-baiting" and seeking to alienate the left, I’m truly trying to engage in a real dialogue with those leftists in the antiwar movement who see that there’s a problem, that something isn’t working and needs to be fixed. I’ve seen some evidence that this is possible in the writings of Kevin Zeese, of Voters for Peace, and also in the analysis of Louis Proyect, whose "Unrepentant Marxist" blog is thoughtful and interesting. Unrepentant Marxists, yes – unrepentant sectarians, not so much.
During the past three years, the trend toward "criminalization" of everyday conduct has intensified greatly. (Criminalization is the conversion of conduct that was once considered a contractual dispute, or merely socially stigmatized, into a criminal offense.) This trend won't reverse itself until we convince lawmakers that criminal sanctions aren't necessarily the best way to deal with moral, social, or political problems and disputes.
Originally Posted At Sovereign Society By Mark Nestmann August 20, 2010
If you're like most Americans, you violate numerous laws each day, probably without even knowing it.
As I wrote in a blog entry nearly three years ago, in New Jersey, you can be arrested for driving by your own home. In Florida, a man was sentenced to six years in prison for carrying cash. In Pennsylvania, a woman faces prison for yelling obscenities at her clogged toilet. You can even be imprisoned for the crime of withdrawing lawfully earned currency from your own bank account.
Over the past three years, the trend toward what I call "criminalization" of everyday conduct has only intensified. (Criminalization is the conversion of conduct that was once considered a contractual dispute, or merely socially stigmatized, into a criminal offense.)
Now, according to federal prosecutors in New Jersey, violating a Web site's "terms of service" constitutes a crime. Under this interpretation, if you disregard – or simply fail to read (or understand) the lengthy and legalistic service agreement of any Web site, you risk imprisonment!
The defendants in this case purchased tickets in bulk from an online ticket reselling business, Wiseguy Tickets. They stand accused of reselling the tickets at a higher price, in violation of Wiseguy's terms of service. Prosecutors also brought hacking charges against the defendants for bypassing technical measures to prevent bulk purchases. But it's the criminalization of violating a Web site's terms of service that concerns me the most.
Most Web sites say they can change their terms of service anytime. To avoid prosecution under this theory, you'd need to read a multiple pages of legalese every time you log in to your favorite Web site. Even entering a fake name on a social networking Web site may be a crime! Federal prosecutors in Los Angeles indicted a woman because she violated a social network's terms of service. Fortunately, the trial judge threw out the case.
And there's no reason why this trend is limited to the online world. Imagine that you purchase a new car from your local dealer. You drive it for a few months, never bothering to read the terms of service in the back of the manual. One day you get pulled over for a traffic ticket. The cop asks you where you buy your gas. "From wherever it's cheapest," you reply. "Wrong answer," says the cop, as he puts you in handcuffs. It turns out that the terms of service stipulate that you must purchase all your gas from a specific gas station recommended by the dealer. If you don't, under the DOJ's latest pet theory of criminalization, you'd be committing a crime.
Naturally, there's no way that police can arrest you every time you knowingly or unknowingly violate the terms of service for an online – or offline – product or service. But the potential for arrest is always there, giving prosecutors wide discretion in pursuing the most visible – or more likely, the most politically viable – of such "crimes."
The trend won't reverse itself until we convince lawmakers that criminal sanctions aren't necessarily the best way to deal with moral, social, or political problems and disputes. Let's hope that time comes soon – although I'm not holding my breath!
Mark Nestmann is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society’s Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.
Under ObamaCare, seniors who rely on Medicare will replace Medicaid recipients at the bottom of the health-care ladder as early as 2019, five years after the individual mandate kicks in.
Even Obamacare’s biggest cheerleaders won’t be able to ignore Medicare chief actuary Richard Foster forever.
Based on current law, Foster says, seniors who rely on Medicare will replace Medicaid recipients at the bottom of the health care ladder as early as 2019, five years after the individual mandate kicks in. That’s when the fees Medicare pays to providers will be slashed below Medicaid rates, which are already well below market prices.
“And if you’re in a plan that pays the lowest rates, you’re in trouble,” John Goodman, president of the National Center for Policy Analysis, told The Examiner.
That’s because the $575 billion cut to Medicare over the next decade — which is needed to pay insurance subsidies for 32 million new people — will force one in seven hospitals, nursing homes, home health agencies and hospices out of business, according to the formal Medicare trustees report released on April 22. By 2050, 40 percent of existing health care facilities will forced to close their doors.
Nearly half of the 32 million newly insured people will be enrolled in Medicaid (those whose incomes are at or below 133 percent of the poverty line will have no choice), but they shouldn’t expect the level of care that current Medicaid recipients receive, Goodman adds.
“For many low-income people, there’s not going to be much difference. Now they get care at community health centers and hospital emergency rooms. The Medicaid system won’t be able to handle them in a substantially different way. They’ll end up going to the same doctors and the same facilities they go to as uninsured.”
But there will be one difference: The wait for care will be much, much longer. Obamacare will provide 100 million Americans with much more generous insurance than they have today, Goodman points out, with no co-pays and no deductibles. This will give people new incentives to access medical care even though there won’t be enough doctors to handle the increased demand. A looming shortages of nurses won’t help, either.
Many physicians already refuse to accept new Medicare patients. More will refuse when payments from the government fall below cost. “It will be a game of medical musical chairs,” Goodman predicts. And when the music ends, it will be 15 million vulnerable senior citizens who wind up without a seat.
A convergence of liberal-progressives with conservative-libertarians centering on the autocratic, corporate-dominated nature of our government may be growing. No matter how often corporatists call themselves conservatives, the two hail from very different moral, historical and intellectual antecedents. Once this slowly awakening giant of American reform shucks off the corporatists who divide, distort and deny many common identities, a dynamic civic force for freedom, fairness and prosperity will define and advance its own political and electoral agendas.
Originally Posted At The Wall Street Journal By Ralph Nader August 17, 2010
Anticorporatist views are becoming more and more common.
Earlier this year, Barney Frank and Ron Paul convened the Sustainable Defense Task Force, consisting of experts "spanning the ideological spectrum." They recommended a 10-year, $1 trillion reduction in Pentagon spending that disturbed some in the military-industrial complex.
Other members of Congress were surprised by this improbable combination of lawmakers taking on such a taboo subject. But the spiral of bloated, wasteful military expenditures documented by newspapers has reached the point where opposites on the political-ideological spectrum were willing to make common cause.
A convergence of liberal-progressives with conservative-libertarians centering on the autocratic, corporate-dominated nature of our government may be growing. To be sure, there are obstacles to a synthesis of anticorporatist views becoming a political movement.
One is over-concern with labels and abstractions by both political factions. Yet once they take up the daily injustices—credit-card ripoffs, unsafe drugs and contaminated food—affecting people everywhere, common ground can be found. Another obstacle is that the concentrated power of big money and lobbies have so overtaken both political parties and controlled the parameters of political conversation that progressives and libertarians fail to recognize their similar, deep aversions to concentrated power of any kind. Finally, the anticorporatists in both camps are reluctant to collaborate in principled action because they have battled over issues for so long where they do not agree.
Yet this reluctance may be fading as abuses of corporate power, especially when supplemented by state power, become more plain to all. The multitrillion dollar bailout of an avariciously reckless Wall Street rammed through Washington, without any input from an angry public, epitomized shared outrage.
This perceived feeling of being excluded, disrespected and then taxed for the crimes and abuses of big business has been building for years. The loss of both sovereignty and jobs have produced a lasting resentment toward the antidemocratic North American Free Trade Agreement, the World Trade Organization (WTO) and unpatriotic U.S. corporations that hollow out communities as they shift industries to China and other repressive regimes.
I have received earfuls on these matters during my three nationwide presidential campaigns from both workers and taxpayers who call themselves conservatives or progressives. The Main Street versus Wall Street figures of speech bespeak a deep sense of loss of control over just about everything that matters to people's lives. In their daily discourse they know that big government beats to the drums of big business or, to use the elegant words of conservative philosopher Russell Kirk, "a host of squalid oligarchs."
Because corporatists falsely assume the mantle of conservatism, they keep agendas that the left and right would agree on—such as cracking down on corporate crime, fraud and abuse against consumers, taxpayers and investors—from being heard and talked about and acted upon. The issues that don't get nearly the attention they deserve include opposition to the arbitrary erosion of privacy by the Patriot Act and to the daily collection and storage of personal consumer information in corporate databases; resistance to tax-funded sports stadiums, the Federal Reserve's out-of-control powers, unconstitutional wars and monopolistic practices against small business, and to the swarm of corporate welfare subsidies, tax havens, handouts, giveaways and bailouts.
Corporate abuse is recognized by elements in our society that might surprise you. Some years ago, at a sizable gathering of evangelical Christians, I denounced the rampant direct marketing to children of junk food and violent programming, undermining parental authority and furthering childhood obesity and mental coarseness. As people of faith, as parents and citizens, the audience responded enthusiastically.
No matter how often corporatists call themselves conservatives, the two hail from very different moral, historical and intellectual antecedents.
The powerful nuclear power industry discovered this difference in 1983, when a tight coalition of conservative, environmental and taxpayer groups defeated the deficit-ridden Clinch River Breeder Reactor in Tennessee. More recently, in 2008, demands coming from both the left and right that Congress ban genetic discrimination by health insurers overcame the corporatist lobby.
In several polls, including ones by Businessweek and Gallup, a sizable majority of Americans say that corporations have too much control over their lives, that both major parties are failing and that America is going in the wrong direction.
Once this slowly awakening giant of American reform shucks off the corporatists who divide, distort and deny many common identities, a dynamic civic force for freedom, fairness and prosperity will define and advance its own political and electoral agendas.
Mr. Nader is a consumer advocate and the author of "Only the Super-Rich Can Save Us" (Seven Stories Press, 2009).
The real kicker came last month when Obama enlisted the beloved Andy Griffith to star in a tax-paid TV spot allegedly designed to allay seniors' fears about Obamacare. But as FactCheck.org noted, the ad was grossly misleading and seniors' fears about Obamacare's $500 billion in Medicare Advantage spending cuts are entirely justified.
It is no surprise that Americans are angry this year about reckless government spending. Through TARP, the economic stimulus, Obamacare and many other government initiatives, more than $2 trillion has been used to bail out banks, automakers, automotive unions, drug-makers, large insurance companies, well-connected investment firms, insurance giants, homeowners, construction companies, artists, actors, state governments and agricultural corporations, to name just a few. But guess what -- President Obama is also using tax dollars to bombard Americans with propaganda for his policies, most of which they clearly oppose.
A new congressional report made public Monday points to the president's extensive use of tax dollars to pay for propaganda. The most obvious examples highlighted by Rep. Darrell Issa, R-Calif., and Republicans on the House Oversight Committee are the expensive, legally mandated road signs that trumpet Obama's failed economic stimulus program. There are many others as well. Recovery.gov, for example, is a tax-paid website that cost $18 million to create, yet does little more than peddle job-creation data that are discredited almost as soon as they are posted.
Last year, the Issa report notes, the National Endowment for the Arts was caught holding a conference call to recruit artist-grantees to promote Obamacare. Then there is Nancy-Ann DeParle, Director of the White House Office of Health Reform, who once urged citizens to report "fishy e-mails" about Obamacare. But DeParle sent a few "fishy e-mails" herself in March. Her "overtly partisan, unsolicited health reform e-mails" originated from her White House e-mail address and went to "career civil servants in Executive Branch agencies" seeking their help in getting Obamacare through Congress, according to the Issa report. The White House has not answered congressional inquiries about the matter.
The real kicker came last month when Obama enlisted the beloved Andy Griffith to star in a tax-paid TV spot allegedly designed to allay seniors' fears about Obamacare. But as FactCheck.org noted, the ad was grossly misleading and seniors' fears about Obamacare's $500 billion in Medicare Advantage spending cuts are entirely justified. Obama is not the first president to misuse taxpayer resources this way -- the Issa report recalls the Bush administration's propaganda for its No Child Left Behind and Medicare Part D initiatives. But the adolescent plea that "everybody else is doing it" is no more likely to cut it with taxpayers than it does with conscientious parents.
Nobody complains when MoveOn.org, left-wing billionaire George Soros or the National Association of Manufacturers funds advocacy campaigns. The First Amendment protects such speech. With all of the affronts he has dealt to American taxpayers, however, Obama only adds injury to insult by making them pay to mislead themselves.
A Republican House candidate in Florida, former Florida Senate majority leader Daniel Webster, wants retirees to "share the burden" of deficit reduction by cutting Social Security benefits approximately $100 a month. Has the Democratic Party successfully infiltrated the ranks of Republican public officials and candidates for higher office with agents provocateur?
A Republican House candidate in Florida, former Florida Senate majority leader Daniel Webster, wants senior citizens to “share the burden” of reducing the national budget deficit through cuts to Social Security benefits. The cuts Webster proposes would amount to approximately $100 a month for typical retirees.
When one reads accounts like this he can’t help but wonder whether the Democratic Party has successfully infiltrated the ranks of Republican public officials and candidates for higher office with agents provocateur. Or, the GOP could simply be living up to its well-earned moniker of TSP, “The Stupid Party.”
Republicans seem to have a death wish where Social Security is concerned. It’s a kinda woulda, coulda, shoulda syndrome with Republicans where Social Security is concerned. If only we had never created Social Security in the first place; if only we had gotten the federal tax system right from the beginning; if only we had gotten economic policy correct after the Great Depression, THEN everything would be a lot better. Well yeah, they would be. But we didn’t, and they aren’t so get over it Republicans.
If Republicans insist on imposing the logic “we should not have created Social Security therefore we should undermine it”—all in the name of the greater good, of course—they not only will turn average people over the age of 50 against the Republican Party, they will harden the divide and make it impossible to cut other parts of the budget that do far more fiscal harm and far less social good than Social Security. Moreover, suicidal pursuit of the Republican Social-Security Death Wish will blow back on the few bright lights and truly smart people in the party, such as Congressman Paul Ryan from Wisconsin.
One can see the way liberals manipulate the crack-pot ideas of Republican agents provocateur in the Huffington Post article reporting Webster’s suicidal proposal, hanging Webster’s proposal around Ryan’s neck like a millstone:
“Rep. Paul Ryan (R-Wisc.), the House GOP's point man on the budget, introduced legislation that would partially privatize Social Security and would ‘modernize’ the retirement age, but his proposal has won only 13 cosponsors.”
Far from cutting back on retirees’ retirement income, Ryan’s comprehensive Social Security Reform proposal increases it and provides current retirees and those close to retirement an iron-clad guarantee that they will receive at least as much retirement income as they have been promised by Social Security. But those facts will be lost in the heat of the moment as congressional liberals and their mouthpiece AARP stoke seniors’ fear and spread the word, “Republicans are at it again trying to cut your Social Security benefits.”
The only question remaining is, have Republicans lost their minds or are they really that stupid? It really doesn’t matter which though; either way, these are the kinds of ideas that reverse political fortunes in a heartbeat. Somewhere in California, Nancy Pelosi is smiling today.
Do what you can to defeat any incumbent, no matter which party he belongs to, if he is squishy on the issue you regard as fundamental. Why is this so important? Incumbents must become deathly afraid of your movement. Take out a few dozen of them in the next election and the one that follows, and many others will cooperate. As Sen. Everett Dirksen put it so long ago, "When we feel the heat, we see the light." In short, you do not settle for the lesser of two evils. You eliminate them both, one election at a time: first the softie, then the newbie.
Originally Posted At GaryNorth.com By Gary North August 16, 2010
Eight Unbreakable Rules for Hard-Core Tea Party Activists (or Any Other Special-Interest Coalition)
I joined the conservative movement in 1956 when I joined Fred Schwarz's Christian Anti-Communism Crusade. I wrote an anti-FDR high school term paper in 1958. I supported the Goldwater for Vice President movement in 1960. I voted for Goldwater for President in 1964. I voted for Reagan's Republican primary gubernatorial challenger in 1966, William Penn Patrick, because I thought Reagan was too liberal. (I was right; he imposed income tax withholding in his first term as governor.) I was Ron Paul's first research assistant in 1976.
I am hard core. I have been hard core for a long time.
I am writing this for those of you who are equally hard core.
Here are ten facts of American national politics that you must understand to get meaningful change.
1. You can't beat something with nothing. 2. 80% of politicians respond only to two things: (1) fear; (2) pain. 3. Bureaucrats (tenured) respond only to one thing: budget cuts. 4. Political reform never comes as long as the tax money flows in. 5. The #1 goal is to reduce the government's funds, not re-direct them. 6. Congress's club system sucks in 80% of new members by term #2. 7. Politicians listen to their peers, not to their constituents. 8. Money from the government buys off most voters. 9. Most citizens care little about politics and know less. 10. This gives influence to organized swing-vote blocs.
The political system was summed up a generation ago by the man I regard as the elder statesman of the hard-core wing of the American conservative movement, M. Stanton Evans: "Evans's Law of Political Perfidy."
When our friends get into power, they aren't our friends any more. To this, I add North's Law of Partisan Politics:
When a movement is in either political party's hip pocket, it will be sat on. If you do not believe this, then you are a sheep for the shearing -- and then, after several shearings, the roasting. You are on some politician's menu.
THE RULES OF ENGAGEMENT
These are eight basic rules of engagement. There may be others, but these are fundamental. If you do not believe these, you are headed for disappointment.
1. Vote for a hard-core challenger on the other side against a squishy incumbent. This rule separates the hard core members from the soft core members. It has a corollary: A first-term incumbent next election is easier to beat than a squishy incumbent this election. It is always hard to defeat an incumbent. Do what you can to defeat any incumbent, no matter which party he belongs to, if he is squishy on the issue you regard as fundamental. Why is this so important? Incumbents must become deathly afraid of your movement. Take out a few dozen of them in the next election and the one that follows, and many others will cooperate. As Sen. Everett Dirksen put it so long ago, "When we feel the heat, we see the light." In short, you do not settle for the lesser of two evils. You eliminate them both, one election at a time: first the softie, then the newbie.
2. Hold your newly elected politician's feet to the fire the first time he breaks ranks on a key vote. He is like a puppy. When he leaves a mess on the carpet, get out the switch. "Bad dog! Bad dog!" Let him remember that switch. Let him fear that switch. The second time he does it, warm up the car. You and he will be taking a trip to the pound. You are his voter only for as long as he is your representative. Politicians respond to only two things: fear and pain.
3. Get him to sign a resignation letter. Before you work for him, make sure he has signed a resignation letter. This letter says the following:
To the voters of [district, state]:
I am making this public. If I ever vote for [whatever], I will turn in my letter of resignation to the [government body] within 24 hours.
If I fail to do this, I expect voters to vote against me at the next election, since I clearly cannot be trusted.
I expect my opponent in the primary to defeat me next time, and if he doesn't, my opponent in the general election will. And should.
Very truly yours,
Name Candidate for [whatever]
This is a political suicide letter. You will see who is serious about your #1 issue and who is not by means of a signed resignation letter. Post it online. If he refuses to sign it, start working to undermine him after he defeats the squishy incumbent. Above all, do not trust him.
No candidate will sign more than a few of these. Any candidate who will not sign at least one is just another glory-seeking, power-seeking, retirement bonanza-seeking political hack. Like a drone bee who is useful only once in his life, he is useful for only one thing: defeating a squishy incumbent.
You say he refuses to sign? Don't donate any money or time to his campaign. You should vote for him against a squishy incumbent, but you will immediately start working to replace him.
4. Track all of his votes on your #1 issue, and post them online. The Congress deliberately seeks to conceal voting results. Your committee must keep track of every vote related to your interest. This means that someone must follow the voting schedule. If there is no record of his vote, call his office. Ask for an email with his vote recorded. My suggestion: make sure he has an assistant send an email to your committee after every vote in this area, explaining it. Post all of this without alteration. If he breaks ranks, make sure you have a clear statement of why this was a bad vote.
This is boring. This is time-consuming. This is vital. You must see if there is a pattern in his voting on your issue.
I wish there were watchdog sites that cover every vote. Be sure there is one for your special interest.
WordPress is free (www.WordPress.org). A domain name costs $10 a year to register. A multi-site hosting service like Hostgator is $10 a month or less. Have a separate site for every candidate and elected official.
This would make a great civics project for home schoolers: track a candidate for the school year. Then turn the task over to a new student. Have the committee run the sites, but students can do the grunt work. It is good practice.
5. Find out who his largest campaign donors are. This will tell you who will have the most clout when he takes office. Investigate the PACs. Investigate the donors who send in the maximum donation allowed. Are they members of one group? Post this information on the site that you set up to monitor his votes.
6. Instill fear. This is your #1 task, once he takes office.
7. Inflict pain. This is the basis of #6.
8. Trust, but verify. If your group refuses to verify, it should not trust.
CONCLUSION
Politics is not based on love, because civil government is based on coercion. Do not impose "tough love" on a politician. He is not to love you. He is to obey you. You are not to love him. You are to monitor him. Impose negative sanctions and positive sanctions wisely.
Politicians surround themselves with young men and young women who serve as staffers, plus a few old-timers who have survived in the staffing system and who are unimpressed with their bosses, but are even less impressed with the boss's constituents. Politicians spend time in each other's company. They are not much impressed with their colleagues, but they are very impressed with themselves. They are not impressed by their constituents. Finally, they spend time raising money. So, they have to spend time with lobbyists.
I shall now end my little lesson on politics with a verbatim citation from one of the great masters of state-wide politics, Jesse Unruh. He was the Speaker of the California Assembly in the late 1960s. He was known as Big Daddy. He ran against Ronald Reagan in 1970 and lost. But he later was elected state Treasurer. Here is what he said about the proper attitude toward lobbyists:
"If you can't eat their food, drink their booze, screw their women, and still vote against them, you have no business being up here." So committed was he to this philosophy of life that he chose to die of prostate cancer at age 65 rather than have his prostate surgically removed, because he would not risk the sexual impotence that might result from surgical removal.
He loved dealing with lobbyists.
We are dealing with dedicated people. We are dealing with power-seeking, often ruthless people. Don't try to buy them off. Don't try to sweet-talk them. If they don't vote the way you want them to vote, defeat them. This, they understand. This, they fear.
Either they are on your menu, or you are on theirs. I suggest the former.
Social Security has a problem that’s even bigger than its insolvency, which is that it offers a terrible deal for young workers. For young, single workers all Social Security promises (a promise it can’t even afford to keep) is about a 1.5 percent real rate of return. What it can afford to pay is more like half a percent, which is more like passbook interest than a real investment return. Polls consistently show that strong majorities of younger workers don’t expect to ever collect any Social Security benefits.
Originally Posted At The Daily Caller By Phil Kerpen August 16, 2010
Paul Krugman’s astonishingly incorrect column about Social Security’s finances is based on the premise that anticipated deficits in the Social Security program may never materialize. A couple of years ago, he could have made that claim with a very slight chance of being correct. This year, facts have already overtaken his weak argument: the CBO reported earlier this year that Social Security is already spending more in benefits than it collects in taxes, which the program’s own trustees confirmed last week.
The cash-flow deficit matters because the so-called Social Security Trust Fund that has supposedly been accruing value since 1983 has already been raided and spent by Congress on unrelated programs. In its place are a bunch of IOUs from the general fund of the Treasury. With the program now running deficits, those IOUs are being redeemed – but because Congress has already spent the money, it has to be replaced with cuts to other spending, new taxes, or more federal borrowing. In other words, precisely the options that would be available if the trust fund didn’t exist at all.
Social Security’s trustees predict the program will run deficits this year and next year, then return to surplus for three years (if this optimistic prediction comes true, we can expect Congress, as usual, to spend the surpluses on unrelated programs) before tipping into permanent and growing deficits starting in 2015.
The basic problem is demographic. Social Security was designed as a transfer program: current workers pay for the retirement of current retirees. That system worked when the number of workers was growing faster than the number of retirees, but that’s no longer the case.
Fifty years ago there were 16 workers for every retiree. This year, for the first time, it dropped below three workers per retiree, and in 10 years the trustees project will drop to 2.5, followed by a drop to 2.1 by 2035. If Social Security continues to be a transfer payment, it will place an incredible strain on workers in the near future and help derail economic growth.
Higher payroll taxes would kill jobs, slow the economy, and harm the financial markets. Social Security simply cannot be propped up in its present structure without damaging American workers and the economy.
President Obama’s deficit commission will likely recommend some combination of tax hikes, benefit cuts, and increases in the retirement age. While these moves might alleviate the problem from the perspective of federal government finances, they would do so at the expense of workers.
Social Security has a problem that’s even bigger than its insolvency, which is that it offers a terrible deal for young workers. For young, single workers all Social Security promises (a promise it can’t even afford to keep) is about a 1.5 percent real rate of return. What it can afford to pay is more like half a percent, which is more like passbook interest than a real investment return. Polls consistently show that strong majorities of younger workers don’t expect to ever collect any Social Security benefits.
Democrats like Krugman smell a political opportunity and are going to enormous lengths to claim that there is no problem and pursue the politically attractive option of burying their heads in the sand. An option that will, by law, result in enormous benefit cuts that will hit the same workers they claim to care about.
There is another option. We must begin investing Social Security dollars in real assets that will earn a real rate of return, instead of paying them out to current retirees and allowing Congress to waste any surplus on unrelated federal programs. Back in 2005, the chief actuary of Social Security found that at least four separate proposals could achieve full solvency by harnessing the power of higher investment returns, without tax increases of benefit cuts.
There are two ways to do it—allow government to centrally invest Social Security dollars, like a pension, or allow workers to make their own investment decisions via personal accounts. Democrats are wrong to claim that personal accounts would hand Social Security over to Wall Street because – unlike the central investment option, while Bill Clinton favored – individuals would make their own decisions along with their choice of financial advisers.
The idea would be to take control of retirement away from politicians in Washington and from politically connected Wall Street insiders and put it in the hands of workers themselves. Even the most risk-averse could choose to invest in government bonds and earn a higher return that Social Security currently promises.
One key question is how to pay for benefits of current retirees if the taxes from current workers aren’t shipped immediately out the door. That is a real problem, which already exists because the same dollars can’t be spent twice, and the money we’re spending on benefits now won’t be there when current workers retire. The best solution is to cut other, unrelated wasteful spending to shore up benefits while transitioning younger workers into a sustainable, reformed system. We can start by repealing the hundreds of billions of dollars of unspent stimulus.
Whether you agree with my preferred reform or not, the simple fact is that Social Security is already in deficit and can’t afford to keep its promises. That means the status quo is not an option.
Mr. Kerpen is vice president for policy at Americans for Prosperity.
If social justice is your goal, go ahead and raise marginal tax rates for the rich. Making the rich poorer will certainly reduce inequality. Why should you care if the total amount of taxes paid by the rich goes down, economic growth goes down, fewer jobs get created, and the government falls deeper into debt? In fact, this is a perfect way to create a permanent crisis that never goes to waste. As a full throated Progressive you can run for Congress claiming that you are looking out for the little guy because you are sticking it to the rich.
The debate rages over whether our country can afford to extend the Bush tax cuts for the rich. Progressives argue that the ballooning Federal debt is a legacy of these tax cuts.
There is one unreported flaw in this argument. As data from the IRS show, George Bush did not cut income taxes. He increased them. In fact, Bush increased income taxes not only for the rich but for at least half of all tax filers. Only the poor paid less income tax under George Bush than under Bill Clinton.
WHAT?
Go to the IRS website and add up the numbers for yourself. During the eight years of the Clinton Administration the Federal government collected a total of $5.66 trillion dollars in individual income taxes. During the eight years of the Bush Administration the Federal government collected approximately $7.45 trillion dollars in individual income taxes. The rich - that is, the top 1% of taxpayers - not only forked over a trillion dollars more to Uncle Sam under Bush than under Clinton, their share of the income tax burden increased from 33% to 38%.
But wait, there's more.
During the eight years of the Clinton Administration the rich paid income taxes at a blended rate of 20.6%. During the eight years of the Bush Administration the rich paid income taxes at a blended tax rate of 21.3%. Yes, the actual tax rate that matters when you fill out the bottom line of your tax return went up for the rich under George Bush.
How can this be?
The explanation for this apparent paradox is simple. The problem is that no one wants to hear it. Not the pundits. Not the press. Certainly not the leaders of the Democratic Party. Oddly enough, even the Republicans are oblivious.
George Bush cut the marginal tax rates paid by the rich, and everyone else for that matter. These are the tax cuts that are about to expire. The marginal tax rate is the rate you pay on the last dollars you earn. The blended tax rate is the effective rate you end up paying across all of your income. The total amount of tax you pay equals your blended tax rate times your taxable income. And it's the total amount of tax collected that finances the government.
As hard as this is for some people to accept, the rich change their behavior when their marginal tax rates are reduced. The working rich work harder and longer. They expand their businesses, creating jobs. The idle rich shift investments from lower yield tax-free government bonds into higher-return taxable investments, the kind of investments that finance companies that create jobs. Exactly the opposite happens when marginal tax rates go up, as they are scheduled to do unless Congress acts.
The rich do not get richer because they are stupid. Being rational people, they are usually happy to pay more taxes if at the same time they also take home more after-tax dollars. And that's exactly what they did under George Bush. The math works because the pie gets bigger.
So if social justice is your goal, go ahead and raise marginal tax rates for the rich. Making the rich poorer will certainly reduce inequality. Why should you care if the total amount of taxes paid by the rich goes down, economic growth goes down, fewer jobs get created, and the government falls deeper into debt? In fact, this is a perfect way to create a permanent crisis that never goes to waste. As a full throated Progressive you can run for Congress claiming that you are looking out for the little guy because you are sticking it to the rich.
Meanwhile, when you asleep-at-the-switch Republicans finally learn how to tell the difference between nominal tax rates and actual tax collections, please fess up to the real source of the ballooning national debt. Your guy George Bush was the biggest spender in American history, at least until his incompetent presidency delivered Barack Obama to the Oval Office. Bush spent $5 trillion dollars more of our money than Bill Clinton. Had Bush frozen the federal budget when he came into office he would have left Obama a surplus. One of the saddest things about our broken two-party system is that every time Republicans gain power they spend like Democrats. Understand now why the Tea Party wants nothing to do with your incumbents?
Do these facts surprise you? Is this the first time you've heard that George Bush was the biggest tax collector in American history? Were you aware that the rich paid a higher blended tax rate under Bush than under Clinton? Since reporters seem more willing to parrot talking points than dig up facts, spend a little time on www.irs.gov and see for yourself. You can also ponder what this selective national blindness says about our dysfunctional politico-pundit complex and its handmaidens in the media.
Bill Frezza is a partner at Adams Capital Management, an early-stage venture capital firm. He can be reached at bill@vereverus.com. If you would like to subscribe to his weekly column, drop a note to publisher@vereverus.com.
At a return of less than 2.5 percent, Social Security is a bad deal for me but it is going to be much worse for those who are younger than I. For today's 21-year-old, Social Security offers a negative return.
Originally Posted At Mises Daily By Paul Cwik August 13, 2010
Oh joy, oh joy! It has finally arrived! You wouldn't believe how excited I was to receive a letter from the Social Security Administration. In the letter, they dutifully showed me how much taxable income I have ever made. (Is it me, or is there something really creepy about that?) They showed me how much I have paid in taxes and how much my employer also "paid." Then they showed me how much my payment would be if I retire at full retirement (67 years old — not 62 or 65 like you may have heard) and if I delay "collecting" until I turn 70.
It is no secret that I turn 40 this year. That means I have another 30 years of work in front of me. I have (for fun) just taken an online life-expectancy survey, and it says that I will live until the age of 86. So let's assume that these numbers are correct. I will work for another 30 years and then have 16 years to spend it all.
According to the Social Security Administration, I will receive $2,522 a month during those 16 years. The value of that money when I turn 70 is a present-annuity-value calculation. For the purpose of this example, let's pick an easy interest rate of 5% per year. So the value of the Social Security payments (compounded monthly) for 16 years at annual rate of 5% is $335,444.57. In other words, for me to privately do the same as Social Security, I will need to have $335,444.57 in cash when I turn 70 and deposit it in a security that has a 5% annual return.
To take this example a step further, how much money would I have to set aside each year at an annual compounded rate of 5% to hit this target? Using some "quick math," we see that I would have to set $5,048.91 aside each year. Well, this does not seem too unreasonable. One might think that this is equivalent to putting away the maximum of $5,000/year in an IRA, and one would not be wrong for thinking that way.
Unfortunately, there is a larger point that has been missed. I have already been taxed for all of the previous years that I have worked. The Social Security Administration informs me that I have currently sunk a little more than $80,000 into this governmental pyramid scheme. Setting aside any interest I could have received over the past 21+ years, let's assume that they give me a lump sum payment today of $80,000.
Suppose that I take that $80,000 and put it into a security that gives me an annual return of 5% and I do not add another single cent. How much would I have when I turn 70? $345,752.00! I have already exceeded the target needed for the Social Security Administration to fulfill its "promise" to me.
Alas, I do not think that it will do me any good to write a letter to the Social Security Administration explaining that I have reached my target and that they no longer need to tax me. In fact, the letter states, quite explicitly, that I must maintain my current earning rate to collect the stated numbers. So at this point any additional taxes that come from me are just wealth extractions with no benefit to me.
You may think that this is a bad deal for me, and it is, but it is going to be much worse for those who are younger than I. At least I am still making a positive rate of return, somewhere between 2% and 2.5%.
A person born in 1988 making $30,000/year can expect to receive $1,539/month in the year 2058. The Social Security Administration says that he is expected to live until the ripe old age of 87. So that's another 17 years after retiring at the age of 70. The annuity present value of $1,539/month for 17 years at an annual rate of 5% is $212,938.88. In order to hit that target, he would have to set aside $1,132.50/year in a 5% security. This amount is only 3.775% of his $30,000 annual income.
Social Security and Medicare taxes are 15.3% of his income. If he invested that 15.3% of his income instead, he would be investing $4,590. Supposing that this annual contribution was invested each year for the next 48 years and the principal was collecting 5% interest, instead of the Social Security value of $212,938.88, he would have $863,036.55! That's a little more than four times the return that Social Security is "promising."
Or, to drive the nail home, he is paying $4,590 a year and is getting a future value of only $212,938.88. If he simply took that money and buried it in the dirt, he would have, after 48 years, $220,320! The bottom line is that, for today's 21-year-old, Social Security is a negative return.
Some of us are old enough to remember Newt Gingrich's "Contract with America" that produced huge Republican victories in both houses of Congress back in 1994. However, what did that "Conservative Revolution" (as it was called then) actually produce? The answer: NOTHING! Newt's promise of smaller government was immediately forgotten. Instead, Gingrich, along with Senate Majority Leader Trent Lott, facilitated and helped orchestrate further expansion of the federal government. The "less government" theme that swept house freshmen such as Joe Scarborough, Steve Largent, Sonny Bono, Bob Barr, Helen Chenoweth, John Shadegg, and J.C. Watts into Congress quickly evaporated and this new neocon Republican Party was born.
The GOP is frantically searching for the person who will lead them to the Promised Land (translate: White House) in 2012. Barack Obama is leaving a death stench so heavy that even most of the political allies in his own party are asking him to stay away from their reelection campaigns. You gotta give it to Obama: he has done in one term what most Presidents cannot accomplish until their second (lame duck) term. The problem is, the GOP just can't seem to find their Moses (or even their Ronald Reagan). That means, as far fetched as it sounds now, Obama has a good chance of being reelected. And, once again, when any Democrat candidate for President wins, the GOP will have no one to blame but themselves. 2012 could be another example.
You see, the GOP (including their lackeys at Fox News) either really don't know what a constitutional conservative looks like, or they do know what he or she looks like and don't want them leading the party. I believe the answer is the latter, but in either case, the GOP continually does nothing to groom constitutionalist conservatives for leadership. Just the opposite: such people are routinely ignored, shunned, besmirched, or impugned. (Can anyone say, "Ron Paul"?) Is it any wonder that by the time the general election comes around, the GOP candidate for President is usually nothing more than a Democrat-lite, or a "Democrat in Drag" to borrow from Steve Farrell.
That brings me to one of the people that the talking heads at Fox News and other GOP propaganda centers are routinely discussing as their 2012 Presidential hopeful: former Speaker of the House, Newt Gingrich.
According to Reuters News, "Republican former House of Representatives Speaker Newt Gingrich said on Sunday [July 25th] he will decide after November's congressional elections whether he will make a run for the White House in 2012."
Here's what Gingrich is looking at: he wants to see if the GOP makes significant gains in both houses of Congress in the November elections. If the GOP wins one house (especially if enough real conservatives win), I predict Gingrich will enter the race. So he can ride a conservative wave into the White House in 2012? No! So he can derail any potential conservative momentum that the Tea Parties might be able to create in this year's November elections. You see, Newt Gingrich is the Grinch Who Stole Conservatism from the GOP.
Some of us are old enough to remember Newt Gingrich's "Contract with America" that produced huge Republican victories in both houses of Congress back in 1994. However, what did that "Conservative Revolution" (as it was called then) actually produce? The answer: NOTHING! Newt's promise of smaller government was immediately forgotten. Instead, Gingrich, along with Senate Majority Leader Trent Lott, facilitated and helped orchestrate further expansion of the federal government. The "less government" theme that swept house freshmen such as Joe Scarborough, Steve Largent, Sonny Bono, Bob Barr, Helen Chenoweth, John Shadegg, and J.C. Watts into Congress quickly evaporated and this new neocon Republican Party was born.
Mark it down, if Newt Gingrich is the Republican Party's Presidential nominee in 2012, he will do to whatever grassroots conservative momentum is brought about by this year's congressional victories what he did to the "Conservative Revolution" in 1994: DESTROY IT!
Newt's track record is there for anyone to see. So, why does Fox News continue to promote him as a leader of smaller government or constitutionalism? Does Fox News even have a clue as to what limited government really means? Apparently not.
Remember, Newt Gingrich is a long-standing member of the Council on Foreign Relations (CFR), which is a notorious proponent of globalism and archenemy of national independence, State sovereignty, and limited government. Does anyone at Fox News recall what Admiral Chester Ward said about the CFR? (Plus, how many of the Big Shots at Fox News are themselves members of the CFR?)
Rear Admiral Chester Ward, who was the Judge Advocate General of the Navy from 1956 to 1960 and a former member of the CFR who pulled out after realizing what they were all about, warned the American people about the dangers of this and similar organizations (such as the Trilateral Commission). He said, "The most powerful clique in these elitist groups have one objective in common—they want to bring about the surrender of the sovereignty and the national independence of the United States. A second clique of international members in the CFR . . . comprises the Wall Street international bankers and their key agents. Primarily, they want the world banking monopoly from whatever power ends up in the control of global government."
Admiral Ward also said, "The main purpose of the Council on Foreign Relations is promoting the disarmament of U.S. sovereignty and national independence and submergence into an all powerful, one world government."
Accordingly, as a loyal CFR elitist, Gingrich has supported Big Government programs and policies all of his political life. Gingrich is also an ardent disciple of Alvin Toffler, who is the guru of "The Third Wave" politics. That's why Gingrich refers to himself as a "conservative futurist."
Webster's (1992) Dictionary defines "Futurism" as: "Study of, and interest in, forecasting or anticipating the future, or theorizing on how to IMPOSE CONTROLS ON EVENTS." (Emphasis added.)
Steve Farrell rightly notes that "futurism is a head-in-the-clouds political philosophy, complete with theories and forecasts, which envisions the use of force to insure that those theories and forecasts come to pass." Farrell summarizes "conservative futurism" as "communism with economic vision."
This is why Gingrich went along with Clinton's Big Government agenda, and supported the unconstitutional faith-based subsidies, public-private "partnerships," etc. Gingrich's brand of "conservatism" spawned another Big Government neocon's (Karl Rove—another favorite son at Fox News) "Compassionate Conservative" movement of the G.W. Bush White House, which at the time led to the biggest expansion of the federal government since Lyndon Johnson.
Gingrich's infatuation with "conservative futurism" also helps explain his support for NAFTA, GATT, the WTO, and virtually every other policy promoting globalism and interdependence. It also helps explain why Gingrich and former Vice President Al Gore have worked so closely together in globalist organizations such as the now-defunct Congressional Clearing House on the Future (once chaired by Gore).
Gingrich was also a major proponent of the federal Department of Education, continually supports unconstitutional foreign aid, even to the Soviets and other unfriendly governments, through the Export-Import Bank. In one year (1994-1995) Gingrich voted for nearly $45 billion in foreign aid. He also helped push through federal loan guarantees to Communist China.
Gingrich was the Grand Old Pal of President Bill Clinton. He supported Clinton's unconstitutional wars (as he did Bush's); he supported Clinton's welfare programs, education programs, labor programs, and environmental programs, as well as most of his foreign affairs programs. Gingrich supported spending $30 billion for the Violent Crime and Law Enforcement Act of 1994 that shackled gun owners with new restrictions, federalized a number of crimes, and handed the feds police powers that the Constitution reserves to the states. (I guess the NRA forgot all about that, too.)
Gingrich voted to give billions of dollars to United Nations "peacekeeping" operations; he supported the National Endowment for the Arts; he supports giving illegal aliens amnesty; and he has continually supported increased federal spending and higher taxes.
Campaign for Liberty has an excellent exposé on Newt Gingrich that I encourage everyone to read. See it at:
Also, John McManus has an outstanding video exposing Newt Gingrich as a traitor to conservatism and constitutional government that everyone should watch. See it at:
http://vimeo.com/6445068
In spite of overwhelming evidence that Newt Gingrich is a scheming, double-talking, duplicitous Big-Government globalist of the highest order, many conservatives continue to listen to pro-Gingrich propaganda coming from Fox News and other "conservative" outlets.
If true conservatism has any chance of reemerging within the sheepfold of what is known as the national Republican Party, that fox, Newt Gingrich, must not be allowed to be anywhere near it. Unfortunately, thanks to Fox News (pun too easy to pass up), Gingrich is prowling around the barnyard and doubtless licking his chops at the prospect of having another opportunity to feast on the flesh of unsuspecting conservative sheep that foolishly believe him to be one of them.
The economy is stuck in record postwar stagnation because since the beginning of this recession it has been addressed with throwback Keynesian economics, proven to fail long ago, rather than the more modern supply-side economics that proved so successful in leading to a 25 year economic boom starting in 1982. President Bush joined with the Democrat Congress to enact a Keynesian stimulus package in February, 2008 that had no discernable beneficial effect on the economy. President Obama, elected promising change, passed another Keynesian stimulus package a year later, only 6 times larger, which has again failed to generate any real recovery.
Thirty-one months after the start of the recession, last week's jobs report for July was a fiasco. The Labor Department reported yet another 131,000 jobs lost in July. The Department also revised the June report downward to show 221,000 jobs lost that month from 125,000. The unemployment rate remained at 9.5% only because 181,000 additional discouraged workers left the work force, and so were not counted as unemployed. That makes one million who have fled the work force since April.
As this column has repeatedly noted, the historic data recorded by the National Bureau of Economic Research shows that the average recession since World War II has lasted 10 months, with the longest previously being 16 months. What is President Obama's excuse for still losing hundreds of thousands of jobs 31 months after the recession began?
The July labor report records the army of the unemployed at nearly 15 million. The long-term unemployed, defined as those unemployed for more than 6 months, remained stuck at nearly 7 million, the highest since the Great Depression. The number of additional workers employed part time for economic reasons stood at 8.5 million. The Bureau of Labor Statistics (BLS) defines these workers as those who "were working part-time because their hours had been cut back or because they were unable to find a full time job."
Another 2.6 million were defined as marginally attached to the labor force, including discouraged workers who had given up looking for work. The BLS explains that these individuals "wanted and were available for work, and had looked for a job in the prior 12 months." But they were not counted as unemployed because they had given up looking for work during the prior 4 weeks.
The army of the unemployed and underemployed consequently totals nearly 26 million. This would add up to an unemployed and underemployed rate of 16.5%, more than 2 ½ years after the recession started.
Moreover, major components of the Obama/Democrat political base are getting whacked hard. The African-American community is suffering a depression, with unemployment stuck over 15% for over a year now (15.6% in July). Obamanomics is proving to be the most effective anti-immigration policy in history, with Hispanic unemployment stuck at 12.1% in July. Young voters are particularly suffering as well, with teenage unemployment at 26.1% in July.
The Collapsing Work Force
But the headline jobs and unemployment numbers don't give a complete picture of America's suffering under President Obama's neo-socialism. In yesterday's Wall Street Journal, AEI Vice-President Henry Olsen examined the complete revelations provided by the civilian-employment population ratio.
As Olsen explains, while the unemployment rate measures the percentage of working age Americans who are actively seeking jobs but do not have one, "the civilian-employment population ratio measures the percentage of working age Americans who have a job, whether they are seeking one or not." The trend of this ratio reflects the full extent of the missing discouraged workers who the agent of hope and change has left hopeless, the full jobs gap that has to be made up, and how far we are falling behind in terms of jobs that need to be created. Olsen reports:
Looking at this ratio, America is suffering its largest drop since World War II. When the economy was at its Bush-era height, in 2007, a little over 63% of adult Americans had jobs. Friday's [July jobs] report shows that only about 58.4% [now] do, a decline of nearly 5 percentage points. While the unemployment rate remains steady at 9.5%, the employment-population ratio continues to fall each month. In April it was 58.8%, in May 58.7%, and in June 58.5%.
Olsen's analysis is reflected in the accompanying graph, which shows how many jobs we have lost from where we should be with full recovery.
The Failure of Keynesian Economics
The economy is stuck in record postwar stagnation because since the beginning of this recession it has been addressed with throwback Keynesian economics, proven to fail long ago, rather than the more modern supply-side economics that proved so successful in leading to a 25 year economic boom starting in 1982. President Bush joined with the Democrat Congress to enact a Keynesian stimulus package in February, 2008 that had no discernable beneficial effect on the economy. President Obama, elected promising change, passed another Keynesian stimulus package a year later, only 6 times larger, which has again failed to generate any real recovery.
A stimulus package is "Keynesian" when it is focused on increasing demand, either by increasing government spending and deficits, or by "putting money in people's pockets" to spend, through tax rebates or tax credits. (This is why Obama's repeated claim that one third of his stimulus package was tax cuts is inapposite. They were all tax credits, and refundable to boot, which means they mostly involved checks going to people who had no further income tax liability to reduce.). The Bush/Pelosi February 2008 stimulus, and the Obama/Pelosi February, 2009 stimulus, were almost entirely composed of such Keynesian policy initiatives.
A supply-side stimulus, by contrast, focuses on incentives to increase production. Tops here is reducing tax rates, which enables producers to keep more of what they produce, thereby increasing the incentive to engage in productive activity, such as saving, investing, working, starting businesses, expanding businesses, creating jobs, and taking on the risks and burdens of entrepreneurship. Deregulation reduces the costs of such productive activity, further increasing the incentive to produce. Stable money maintaining stable prices is essential to maintaining the incentive to produce. Cutting spending and deficits leaves the money in the private sector to be used to increase production.
These were the components of supply-side Reaganomics, ending inflation and creating a record shattering 25-year economic boom. That boom ended in 2007-2008 because by then every one of these supply-side planks of Reaganomics had been lost.
Obama's Business Cycle Peak
But as bad as the economy is today, enjoy it, because this is as good as it is going to get under President Obama and his policies. Before any real recovery has gotten underway, we are already past the peak of the business cycle, and headed back down.
Economic growth has steadily declined for almost a year now, from 5% in last year's fourth quarter, to 3.7% in this year's first quarter, to 2.4% in the second quarter. This is with President Obama's comprehensive, across the board, increase in every major federal tax rate next year pumping up the economy this year, as those who can scramble to earn what they can this year, before the grim reaper arrives next year to take it.
Moreover, President Obama is riding the wave now of what Art Laffer has called the slingshot effect. That is the natural tendency of the economy to recover as businesses scramble to rebuild themselves, and workers seek employment, every day until something works. Eighteen months ago, I feared this natural recovery of the business cycle would leave Obama riding an early wave of glory, especially as the natural recovery is always stronger the deeper the recession. That wave of glory would have given him the power to plant even more seeds of America's downfall before he was politically displaced.
But even I was shocked by how the comprehensive fallacies of Obamanomics prevented that from ever happening. Now, the sling shot effect is spent, and by so thoroughly embracing the opposite of every plank of Reaganomics, President Obama has laid the foundation for the opposite results of Reaganomics.
As mentioned above, President Obama's policies already provide for increasing every major, top federal tax rate starting next year. Capital gains tax rates are scheduled to rise nearly 60%, the tax rate on dividends is scheduled to nearly triple, the top income tax rates are slated to spike by nearly 20%, the Medicare payroll tax will rise by 31% on upper income workers, and the death tax will be restored at 55%. That sharply reduces incentives to produce, save, invest, work, start and expand businesses, create jobs, and take the risks of entrepreneurship.
President Obama's tsunami of reregulation starting next year will increase the cost burdens on production at least as much. Already Obama's EPA is moving to saddle production with unreliable, high cost energy, now that cap and trade is stalled legislatively. The regulatory shutdown of offshore drilling, and even lots of onshore drilling, is already killing jobs quite directly, with even worse effects as the impact on energy output is felt.
The coming employer mandate of Obamacare is already discouraging hiring, with that getting much worse once the reality hits. All the regulatory burdens of Obamacare will increase rather than reduce the costs of health insurance. With the individual and employer mandates, that will effectively be another major tax increase. The financial regulatory reform bill adds further costs to finance, when small business needs more rather than less private finance.
Instead of stable money, the Fed is still recklessly pursuing an easy money policy that is keeping interest rates at record lows near zero for record periods, with gold higher than the S&P 500. There is only one way for interest rates to go from here. That is up, which will happen sooner or later, further discouraging investment, and sending the economy further into the downward spiral.
Finally, just the opposite of Reagan's 1981 budget cuts, President Obama came into office exploding spending with his trillion dollar stimulus package, followed by the $400 billion Omnibus spending bill, the trillion dollar Obamacare legislation, a one third increase in welfare in just two years, and still more sons of stimulus that he and Congressional Democrats are still promoting and passing. That created record shattering deficits and debt, with the national debt slated to double now in just four years by 2012, and quadruple by 2020. All of this is siphoning out of the economy the private capital necessary to create new jobs, and killing long-term investment and jobs with the prospect of still higher taxes as a result.
Obama has nevertheless already taken his victory lap this recovery summer, proclaiming himself the savior who stopped another Great Depression. But in reality, he is creating another one under current policies.
Progressive Propagandists
Economic neophytes respond by saying not to worry. America suffered a deep recession in President Reagan's first two years as well. But the economy recovered just fine, and his political fortunes with it.
The only problem with this analysis is the difference between capitalism and socialism. Today we even have bozos from such left-wing extremist fronts as the Center for American Progress arguing that cutting tax rates causes recessions and raising them is the cure.
What these superficial socialists fail to recognize is that the trends at this point in the Reagan years were all just the opposite of the above-discussed current trends portending further economic downturn. Tax rates were heading sharply down, not skyrocketing up. Regulatory burdens were heading sharply down, not sharply up. Interest rates were headed for declines, not spikes.
Moreover, Reagan was in the process of slaying a record Great Inflation that the Washington establishment had concluded could not be stopped. Reagan provided the support and political cover for the Fed's historic monetary policy tightening that brought inflation down from 25% over the two years 1979-1980 to only 6.2% by 1982, and to 3.2% by 1983, breathtaking results given the previous 15 years.
Slaying that Great Inflation dragon, which left blood all over the economy, inevitably contributed to short-term downturn. Any college textbook will tell you that is the natural result of such an inflation reversal. But instead of slaying an historic inflation today, President Obama is laying the foundation for a new one.
Back in 1982, Reagan had already produced results. Besides the great inflation decline, Reagan had already enacted tax cuts and spending cuts, and begun the great deregulation. This was change the American people really did believe in. That is why in the 1982 midterms, the Republicans actually gained Senate seats, even while suffering normal mid term losses in the House.
The Silver Lining: Regime Change
The economy wants to boom. Business is holding $2 trillion in cash on its balance sheets just itching to get to work, produce, and earn real money. Ditto that for bank reserves. Even modest, Reaganite, free market policy moves could tip the economy into boom for several years, unleashing those funds.
But that is not going to happen with prep school Marxists and Limousine Leftists in control of Washington, from Obama to Pelosi and her socialist lieutenants to Reid and his new found East Coast loyalties.
The American people can make it happen this fall, however, not just by throwing the Democrat Left Congressional majorities out. What is needed for true regime change is a political earthquake that will truly shake the Washington establishment out of its rocking chairs. If Republicans not only take the Senate as well as the House, but in doing so win 60 to 80 House seats, enough surviving Democrats will scramble to distance themselves from Obama, which will allow Obama vetoes to be overridden on key issues from taxes to Obamacare. Obama is past his peak politically as well as economically.
The victory of a Republican for Ted Kennedy's seat campaigning against his lifelong dream of socialized medicine should have been a harbinger for Democrats that this was possible. But they are so full of themselves that the lesson was lost on them.
The power is in the American people to save our country this fall. But that requires a zero tolerance policy for Democrats who insist that they are not like the others, but will still keep the Obama/Pelosi/Reid secular socialist machine in power. If we don't get it, reality is going to spank us until we do.
Peter Ferrara is director of entitlement and budget policy at the Institute for Policy Innovation, a policy advisor to the Heartland Institute, a senior fellow at the Social Security Institute, and general counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School.
In the name of still another "stimulus," Democrats are rewarding their own political funders, putting the most fiscally responsible states into even greater distress, and postponing the day of reckoning for spendthrift states. Oh, and Mr. Obama rushed to sign the state bureaucrats bailout bill Tuesday, violating his campaign pledge to give the public five days to read legislation online. As we say, the only way for voters to stop such fiscal abuse is to run this crowd out of town.
The latest bailout for public unions and spendthrift states.
To treat Washington's spending addiction, the November elections are the taxpayer's best chance to stage an intervention. But until then, President Obama and the Democratic Congress are determined to keep pushing strung-out state governments to take one more fix.
Witness yesterday's 247-161 largely party-line House vote to approve a Senate bill shovelling another $26.1 billion out to state education and Medicaid programs. The White House has promoted the bill as emergency assistance for strained state budgets. But this unique brand of therapy drives states to spend more, not less. The "assistance" is so expensive that several governors were begging for relief even before Mr. Obama signed it into law.
Standing with teachers yesterday in the White House Rose Garden, Mr. Obama said, "We can't stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe." Maintaining the salaries and generous benefit plans for members of teachers unions is indeed a top Democratic priority. That's why $10 billion of the bill's funding is allocated to education, and the money comes with strings that will multiply the benefits for this core Obama constituency.
Specifically, the bill stipulates that federal funds must supplement, not replace, state spending on education. Also, in each state, next year's spending on elementary and secondary education as a percentage of total state revenues must be equal to or greater than the previous year's level.
Governor Haley Barbour of Mississippi did the math and figured out his state will be worse off. Mr. Barbour says the bill will force his state "to rewrite its current year [fiscal 2011] budget. Preliminary estimates of the Mississippi Department of Finance and Administration show that we will now have to spend between $50-100 million of state funds—funds that must be taken away from public safety, human services, mental health and other state priorities and given to education—in order for an additional $98 million of federal funds to be granted to education. There is no justification for the federal government hijacking state budgets, but that is exactly what Congress has done."
For Texas, and only Texas, this funding rule will be in place through 2013. This is a form of punishment because the Beltway crowd believes the Lone Star State didn't spend enough of its 2009 stimulus money. Apparently Texas politicians have been clinging to the quaint notion that the government should try to live within its means.
Texans also seem to have an old-fashioned appreciation for the rule of law. On Friday, 22 GOP Members of the state's Congressional delegation sent a letter to House Speaker Nancy Pelosi. "This provision would have Texas violate her own State Constitution," they wrote. "The Texas Legislature has sole authority to determine State appropriations. Moreover, one Legislature cannot bind a future Legislature. Requiring the State to assure that a future Texas Legislature would commit to spend funds in accordance with these provisions would violate the Texas Constitution."
Texas Governor Rick Perry is also opposed to this new "assistance" from the federal government. He understands that one-time payments that force permanently higher state obligations are a windfall for government employees. But if given the choice, taxpayers would just say no.
That's because taxpayers are figuring out that these state bailouts are only making unions more reluctant to share their sacrifice. While Mr. Obama quotes the union figure of 160,000 potential lost teacher jobs, those don't have to come out of the classroom. According to research by Eric Hanushek of Stanford University, student enrollment grew by 22% from 1990 to 2007, but teacher employment grew by 41%. Since 2000, enrollment has grown by 5% but teacher employment by 10%.
The unions themselves could have prevented some layoffs had they been willing to adjust their rich benefits. In Milwaukee, for example, nearly all of the 500 teacher layoffs announced earlier this year could have been avoided if the unions had agreed to change health plans that cost $23,000 per teacher per year for family coverage. They could have accepted a still-rich $17,000 plan. The unions chose the layoffs, betting (correctly) that Democrats in Washington would come to their rescue.
Keep in mind that this teacher bailout also amounts to a huge contribution by Democrats to their own election campaigns. The National Right to Work Committee estimates that two of every three teachers belong to unions. The average union dues payment varies, but a reasonable estimate is that between 1% and 1.5% of teacher salaries goes to dues. The National Education Association and other unions will thus get as much as $100 million in additional dues from this bill, much of which will flow immediately to endangered Democratic candidates in competitive House and Senate races this year.
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So in the name of still another "stimulus," Democrats are rewarding their own political funders, putting the most fiscally responsible states into even greater distress, and postponing the day of reckoning for spendthrift states. Oh, and Mr. Obama rushed to sign the bill Tuesday, violating his campaign pledge to give the public five days to read legislation online. As we say, the only way for voters to stop such fiscal abuse is to run this crowd out of town.
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