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5851  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Cognitive Dissonance Glibness: Obama pressured HAITI not to raise minimum wage on: June 18, 2011, 10:48:28 AM
The Nation (fair and balanced) pulled its Wikileaks story.  Hard not to go 'Media Issues' with this, but the cognitive dissonance of this administration is breathtaking.  Big corporations over workers?  Markets set prices over government?
Columbia Journalism Review

A Pulled Scoop Shows U.S. Fought to Keep Haitian Wages Down

By Ryan Chittum

The Nation has a scoop—or had, actually—from Wikileaks cables showing that the Obama administration pressured Haiti not to raise its minimum wage to 61 cents an hour, or five bucks a day.

The magazine posted the story the other day and has now pulled it, saying it will repost it next Wednesday “To accord with the publishing schedule of Haiti Liberté,” its partner on the piece.

But you can’t stuff the news genie back in the bottle. They already put it in my browser and many others, so I’ll summarize what it said (and I’ll link to it once The Nation republishes it).

Two years ago, Haiti unanimously passed a law sharply raising its minimum wage to 61 cents an hour. That doesn’t sound like much (and it isn’t), but it was two and a half times the then-minimum of 24 cents an hour.

This infuriated contractors for American corporations like Hanes and Levi Strauss that pay Haitians slave wages to sew their clothes. They said they would only fork over a seven-cent-an-hour increase, and they got the State Department involved. The U.S. ambassador put pressure on Haiti’s president, who duly carved out a $3 a day minimum wage for textile companies (the U.S. minimum wage, which itself is very low, works out to $58 a day).

The Nation:

    Still the US Embassy wasn’t pleased. A deputy chief of mission, David E. Lindwall, said the $5 per day minimum “did not take economic reality into account” but was a populist measure aimed at appealing to “the unemployed and underpaid masses.”

Well, hey. Imagine Haitians doing things for their “unemployed and underpaid masses” rather than rich Yankee corporations. The outrage! No wonder we have 9.1 percent unemployment and 16 percent underemployment here while the folks who sent the economy in the tank are back making millions.

Let’s do a little math. Haiti has about 25,000 garment workers. If you paid each of them $2 a day more, it would cost their employers $50,000 per working day, or about $12.5 million a year.

Zooming in on specific companies helps clarify this even more. As of last year Hanes had 3,200 Haitians making t-shirts for it. Paying each of them two bucks a day more would cost it about $1.6 million a year. Hanesbrands Incorporated made $211 million on $4.3 billion in sales last year, and presumably it would pass on at least some of its higher labor costs to consumers.

Or better yet, Hanesbrands CEO Richard Noll could forego some of his rich compensation package. He could $10 million package last year He could pay for the raises for those 3,200 t-shirt makers with just one-sixth of the $10 million in salary and bonus he raked in last year.

And that five dollars a day? The Nation reports that a Haitian family of three (two kids) needed $12.50 a day in 2008 to make ends meet.
5852  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Issues in the American Creed (Constitutional Law and related matters) on: June 18, 2011, 12:16:00 AM
Our conversation here is moot; they don't admit we are part of any hostilities.

The denial and deceit reminds me of the long line of two faced Dems who voted for the Iraq war, caved and blamed when the going got tough, then continued the war 2 1/2 years and counting after they took power.  The Obama camp thinks they own our language.  They put out terms like kinetic action with straight face, ignore this law, but hold open the opportunity to criticize the next President should they someday attempt the same thing.

Bush jumped through all the hoops, House, Senate and UN.  Then gets ripped by the same people who first supported it for conducting an illegal war.  If the Obamites admitted that war powers law is unconstitutional, challenged it and won, they would be robbed of using the issue back against the next President.  Who can still take these people seriously?
5853  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: US Economics, the stock market , and other investment/savings strategies on: June 17, 2011, 11:56:37 PM
"My first reaction is that IMHO the ratings agencies acted with spectacular recklessness and that I have no problem with this." [SEC pursuing fraud charges against rating agencies.]

That was my first thought too.  Too few people were investigated and prosecuted over the last round of widespread sleaze.

My next thought, based on distrust of Obama DOJ, we are probably pursuing the wrong people for the wrong reasons.

I have no idea on the underlying facts at this point, but agree in principle that if the truly guilty can be identified, they will deserve the full force of both civil and criminal proceedings.
5854  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Palin phenomenon on: June 16, 2011, 02:06:11 PM
Right between the level of "I have a dream" and the "Gettysburg Address".

"exceeds that of most chief executives."

“She’s very concise. She gives clear orders. Her sentences and punctuations are logical,” said Paul Payack, president of Global Language Monitor. “She has much more of a disciplined mind than she’s given credit for.”

I've not known many 8th graders to write timely and insightful comment on monetary policy.  Writing in clear, direct sentences makes sense to me.  We all should do more of it.

Leaving unnecessarily during her first term is another thing.  Puts her on a par with 2007-2008 Obama, inexperienced and largely unqualified.  If nominated and running against 4 more years of leftism, I expect to be voting for her.

The media and public should be appalled at the lack of privacy even in official, behind the scenes, government work.  Will we be seeing Rahm Emmanuel's work on the govt payroll in its entirety as well?  How 'bout little Weiner?  Equal protection is an idea that came and went some time ago.
5855  Politics, Religion, Science, Culture and Humanities / Politics & Religion / How China could Fail - Financial Times on: June 16, 2011, 11:52:50 AM
Wrong so far, but I always have doubts that China can continue forward as it is.  I wish for them a stumble only big enough to shake off their rule by the communist-oppressioninsts, and then nothing but continued economic growth and success.
How China Could Yet Fail Like Japan
14 Jun 2011
By: Martin Wolf

Until 1990, Japan was the most successful large economy in the world. Almost nobody predicted what would happen to it in the succeeding decades. Today, people are yet more in awe of the achievements of China. Is it conceivable that this colossus could learn that spectacular success is a precursor of surprising failure? The answer is: yes.

Eightfish | Getty Images
Japan’s gross domestic product per head (at purchasing power parity) jumped from a fifth of U.S. levels in 1950 to 90 percent in 1990. But this spectacular convergence went into reverse: by 2010, Japan’s GDP per head had fallen to 76 per cent of U.S. levels. China’s GDP per head jumped from 3 percent of U.S. levels in 1978, when Deng Xiaoping’s “reform and opening up” began, to a fifth of U.S. levels today. Is this going to continue as spectacularly over the next few decades or could China, too, surprise on the downside?

It is easy to make the optimistic case. First, China has a proven record of success, with an average rate of economic growth of 10 percent between 1979 and 2010. Second, China is a long way from the living standards of the high-income countries. Relative to the U.S., its GDP per head is where Japan’s was in 1950, before a quarter century of further rapid growth. If China matched Japan’s performance, its GDP per head would be 70 percent of U.S. levels by 2035 and its economy would be bigger than those of the U.S. and European Union, combined.

Yet counter-arguments do exist. One is that China’s size is a disadvantage: in particular, it makes its rise far more dramatic for the demand for resources than anything that has gone before. Another is that the political effects of such a transformation might be disruptive for a country run by a Communist party. It is also possible, however, to advance purely economic arguments for the idea that growth might slow more abruptly than most assume.

Such arguments rest on two features of China’s situation. The first is that it is a middle-income country. Economists increasingly recognize a “middle-income trap”. Thus, sustaining rapid increases in productivity and managing huge structural shifts as the economy becomes more sophisticated is hard. Japan, South Korea, Taiwan, Hong Kong and Singapore are almost the only economies to have managed this feat over the past 60 years.


Current DateTime: 11:21:13 15 Jun 2011
LinksList Documentid: 43403188

    * 'Meaningful Probability' of Hard Landing for China: Roubini
    * China Raises Reserve Ratios as Inflation Jumps
    * China's Lending Data Put Policymakers in a Dilemma

Happily, China has close cultural and economic similarities with these east Asian successes. Unhappily, China shares with these economies a model of investment-led growth that is both a strength and a weakness. Moreover, China’s version of this model is extreme. For this reason, it is arguable that the model will cause difficulties even before it did in the arguably less distorted case of Japan.

Premier Wen Jiabao has himself described the economy as “unstable, unbalanced, uncoordinated and ultimately unsustainable”. The nature of the challenge was made evident to me during discussions of the 12th five year plan at the China Development Forum 2011 in Beijing in March. This new plan calls for a sharp change in the pace and structure of economic growth. In particular, growth is forecast to decline to just 7 percent a year. More important, the economy is expected to rebalance from investment, towards consumption and, partly as a result, from manufacturing towards services.

The question is whether these shifts can be managed smoothly. Michael Pettis of Peking University’s Guanghua School of Management has argued that they cannot be. His argument rests on the view that in the investment-led growth model, repression of household incomes plays a central role by subsidizing that investment. Removing that repression – a necessary condition for faster growth of consumption – risks causing a sharp slowdown in output and a still bigger slowdown in investment. Growth is driven as much by subsidized expansion of capacity as by the profitable matching of supply to final demand. This will end with a bump.

Investment has indeed grown far faster than GDP. From 2000 to 2010, growth of gross fixed investment averaged 13.3 percent, while growth of private consumption averaged 7.8 percent. Over the same period the share of private consumption in GDP collapsed from 46 per cent to a mere 34 percent, while the share of fixed investment rose from 34 percent to 46 percent. (See charts.)

Professor Pettis argues that suppression of wages, huge expansions of cheap credit and a repressed exchange rate were all ways of transferring incomes from households to business and so from consumption to investment. Dwight Perkins of Harvard argued at the China Development Forum that the “incremental capital output ratio” – the amount of capital needed for an extra unit of GDP – rose from 3.7 to one in the 1990s to 4.25 to one in the 2000s. This also suggests that returns have been falling at the margin.

If this pattern of growth is to reverse, as the government wishes, the growth of investment must fall well below that of GDP. This is what happened in Japan in the 1990s, with dire results. The thesis advanced by Prof Pettis is that a forced investment strategy will normally end with such a bump. The question is when. In China, it might be earlier in the growth process than in Japan because investment is so high. Much of the investment now undertaken would be unprofitable without the artificial support provided, he argues. One indicator, he suggests, is rapid growth of credit. George Magnus of UBS also noted in the FT of May 3 2011 that the credit-intensity of Chinese growth has increased sharply. This, too, is reminiscent of Japan as late as the 1980s, when the attempt to sustain growth in investment-led domestic demand led to a ruinous credit expansion.

As growth slows, the demand for investment is sure to shrink. At growth of 7 percent, the needed rate of investment could fall by up to 15 percent of GDP. But the attempt to shift income to households could force a yet bigger decline. From being a growth engine, investment could become a source of stagnation.

The optimistic view is that China’s growth potential is so great that it can manage the planned transition with ease. The pessimistic view is that it is hard for a country investing half of GDP to decelerate smoothly. I expect the transition to slower economic growth and greater reliance on consumption to be quite bumpy. The Chinese government is skilled. But it cannot walk on water. The water it is going to have to walk on over the next decade is going to be choppy. Watch out for the waves.
5856  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Politics of Health Care, McKinsey Report on: June 16, 2011, 11:16:09 AM
"devastating McKinsey & Company study that concluded up to 78 million Americans would lose their current health coverage as employers stopped offering insurance because of President Obama's Patient Protection and Affordable Care Act.  The report contradicted Mr. Obama's frequent pledge that under his reform, "if you like your health-care plan, you can keep your health-care plan." "

They lie with such ease, it used to be said of the Clintons.  My health plan is gone and the reasons people like Lawrence Tribe have ascribed to my lack of coverage are false.  Massive over-regulation doesn't lower costs and massive new regulations don't leave existing plans unchanged.  It's not rocket science.

Why was it all or none? Why did they not implement immediately the important reforms Republicans would agree to while we wait for the monstrosity - if the good of the country was the goal.

Why was it delayed implementation? A taste of delayed care?  Why was it 10 years to pay for 6, and then find out it doesn't.

"The deficit-reduction claim also came before House Budget Committee Chairman Paul Ryan drew attention to the law's Ponzi scheme. It's funded by borrowing $521 billion from the Social Security Trust Fund, Medicare, and new long-term care insurance premiums, and by ignoring the $300 billion cost over 10 years of the annual inflation increases in reimbursements to hospitals and doctors. These gimmicks hide the fact that ObamaCare is really $701 billion in the red in its first decade."

Are Ponzi schemes legal in all 50 states?  Would someone please release Bernie Madoff.

I don't get the whole waiver thing.  What basis does the selective waiver process have in equal protection under the law?  What other laws allow for politically-based waivers?  My tax return mandate?  Please grant me a waiver.

The damage done to our economy before its implementation is immeasurable and largely unreported.  See Ryan piece on regulatory uncertainty. 

One reason people buy gold and other non-productive assets is that it is one last places you can put investment money that does not insert yourself into the vicious, highly regulated, ever-changing battle lines of state and federal legislatures and regulators for the crime of ... hiring people.

Some people want to build a better mousetrap.  Other people want to read and study compliance opinions nearly everyday regarding all the changes and administrative ruling updates of highly restraining employment law, payroll law, layoff law, unemployment compensation law, workman comp law, healthcare law...  If you don't want to do all of it, you won't be building a better mousetrap - not in this country.
The smartest guy by far in my school district growing up went on to become a lawyer by way of a top Ivy league law school and made his career in the employee benefits section of a major local utility.  That, unfortunately, not inventing amazing new energy sources or curing deadly diseases, is where the action is.
5857  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential - Bachmann on: June 15, 2011, 09:45:49 AM
"Known for piercing and sometimes inaccurate commentary..."
"She’s described as meticulous and worried about the finer details..."

The second point, finer details, was followed by: "such as soundtracks played to pump up rally crowds", meaning attention to the wrong details.  Either a worthy rip on her or unfriendly journalism.

As one who has followed her since before she held elective office, it is still hard to say if she is excessively gaffe prone or just a victim of the double standard journalism.  Examples, Obama got away with the 57 state comment, presumably he visited some state more than once, but in particular Biden was loaded with falsehoods in the VP debate and then Palin gets ripped for lack of knowledge/experience.

But that double standard is a fact and conservatives need to have well thought out answers if they want to ban gay marriage in states that already have it, ban abortion when over 0.0% of them come from rape, life of the mother etc.

Michele Bachmann won't be the next President, but she may be settling in for a hell of a brush with fame.
5858  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors on: June 14, 2011, 10:43:43 PM
"@Doug  I havent forgotten about your idea of the Saddam surrender statement, mate. The actual document would be next to impossible to find I think, since if indeed it does exist it should be located in the Iraqi national archives in Baghdad.If they still stand. Or maybe in America somewhere. Ill ask around a bit."
Thanks. I just mean a copy - an English translation. I had it in my hand at the time from one of the online services of 1991 and saved it - who knows where.  Nothing earthshaking in it, just a glimpse into his mind and his propaganda.  The detachment from reality was startling to me.  Four pages of flowery BS as I recall, congratulating Iraqis all the way through for their victory over the Zionists and the Imperialists, victory because they stayed proud, victory because they proved this and proved that.  At the very end he accepts UN resolutions xxx... Nothing close to the word surrender is hinted. 
5859  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential on: June 14, 2011, 10:01:58 PM
Bigdog, Thanks! I agree with a lot of that.

"Am I missing anyone?"

Besides Huntsman, the last major one in might be Rick Perry who I know very little about.

"I am not all that big on President Obama.  I've never voted for him and have had the opportunity thrice."

I remember seeing an early debate last time around, Dems in Nov 2007. Details there turned out to be wrong, such as that Obama opposing Hillary's individual mandate and Edwards being a great family man.  Takes the fun out of trying to follow it closely.

Any other Dems that would pique your interest, hypothetically, if the incumbent would suddenly drop out or face a challenge?  Anyone from the mix of Hillary, Biden or the former or outgoing Senators like Evan Bayh, Conrad, Dorgan, Webb, Feingold, others?  Any potential independents or third partiers like a Bloomberg?
5860  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential on: June 14, 2011, 04:39:50 PM
Very true regarding charisma BD.  It is the growing and lasting type that is needed, drawing people to you and to your ideas and keeping the people with you over a period of years.  Bland is fine with me, but nothing gets accomplished if he/she cannot win or cannot govern.

Romney presents well and no one lately has charmed people like Obama did up through his election and his first shot at setting policy.  That mostly wore off with results.  He no longer can fill a script with platitudes or contradictions.  The rest perhaps are at similar levels of personal appeal. 

My point in following Pawlenty is that he is easily underestimated.  Ordinary guy, but he rose very quickly to minority leader in the MN house, to majority leader (which means you did something right when the bluest state switches parties) to the R. nomination against a strong conservative challenger, to youngest Governer in 30 years, to reelection, to leadership in the Gov's assn, to probably first pick of McCain's staff for VP, to getting well noticed now for the highest office and drawing a mostly favorable/acceptable impression from primary voters.  At 6% Gallup, your point is well taken (but the election will not be held today). 

If a Ronald Reagan or a Churchill steps into the fold, then Pawlenty is the local news guy in comparison (Noonan's analogy). Romney is the one who projects stature but the strength of his convictions are still in question - and he could stumble. 
BD, other than if you and I run, who do you lean toward at this point?

"Pawlenty did not take the dare to follow up on his Obamney Care quote and I thought Romney came in well-prepared and articulate on it."

Pawlenty is taking big heat elsewhere today for not taking the fight to Romney on Obamneycare, but (IMO) why should he?  The astute primary observer doesn't need Pawlenty to repeat or build on that point. He said he would not do that, and if this turns into a food fight this early that hurts all of them. Pawlenty has made his point about Romneycare, he got it repeated/entered into the debate through the question, chose the high road, and moved on.  The failed results of Romneycare are still coming in  from now until the election.  It's the law of the commonwealth.  That question is not going to go away and it doesn't have to be Pawlenty pushing it or bringing down the comradery this early.

Others have said Pawlenty looked too pre-programmed in this debate.  Dick Morris is saying he blew his chance (at the whole election).  In the first debate, other people of significance said he looked Presidential.  After coming out with a pretty controversial economic plan, maybe he is the one who escaped the debate without taking harsh criticism.  The charismatic frontrunner basically embraced Pawlenty's economic approach.

'The adventure continues'.
5861  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors on: June 14, 2011, 12:58:01 PM
This is a good point by Crafty: "When there are no Jews to hate, then the next handy non-Muslim target will do just fine, see e.g. what is happening to the Coptic Christians right now in Egypt."  And if there was no Israel, the target becomes Europe and the USA.  You don't have to be Jewish or Israeli when you know the term infidel simply means not one of them.  The context of the wall is also an important point, as is the point that the hiding of military inside of civilian locations for photo drama is a particularly cruel strategy.

Saddam used to call his enemy "the Zionists and the Imperialists", **  but he wasn't attacked and pushed back from Kuwait by Israel, and the Americans weren't there to take land, they were there to help other Arab-Muslims take back their land and to contain his own imperialism.  When the anti-Iraq war crowd claimed that Saddam had no ties to terrorism, they didn't count direct financial support for suicide bombing of Jews in Israel as terrorism, because... attacks against Jews in Israel don't constitute terrorism??

(** I asked previously if someone could come up with the actual Saddam surrender statement of 1991. The 'Zionists' are mentioned often in it.  GM came back with something else, but I thought maybe Andrew as a historian might be able to help to re-locate that document.)

I have a friend of years past with views similar to what I read in Andrew's view.  I didn't view the videos, but this friend maintained that the Israeli Defense forces are the meanest SOBs on the planet.  In the context that the entire region supports their destruction and Israel is still standing, that accusation doesn't seem misplaced.  Then he would point out examples of Israel responding disproportionately to the attacks against them.  I don't find that to be out of place either.  The point is to stop the attacks.  I don't know of any additional lands or anything else Israel's neighbors have that Israel wants, just that the attacks against them would cease.

The only terms of a possible peace settlement come down to what Netanyahu spelled out.  Besides life, all Israel wants is defensible borders.
5862  Politics, Religion, Science, Culture and Humanities / Politics & Religion / 2012 Presidential - Thomas Sowell reviews candidates, praises Pawlenty on: June 14, 2011, 12:12:36 PM
"Some fear that Governor Pawlenty doesn't have the charisma and fireworks rhetoric that they would like to see in a candidate. Charisma and rhetoric are what gave us the current disastrous administration in Washington."
Is Pawlenty Plenty?
By Thomas Sowell

The Republicans' confused assortment of announced presidential candidates-- as well as unannounced candidates and distant possibilities of candidates-- seems to be clarifying somewhat. The withdrawal of Donald Trump and Mike Huckabee, as well as the withdrawal of much of Newt Gingrich's staff, seems like a much-needed weeding-out process.

Although Mitt Romney has been leading in the polls, his lead over other potential rivals has been slim. Being a "front-runner" this far ahead of next year's nominating convention would not mean much, even if Governor Romney's lead and his support were much bigger than they are.

The albatross around Romney's neck is the RomneyCare medical plan that he signed into law in Massachusetts. His refusal to repudiate RomneyCare means that, as a presidential candidate, he would forfeit one of the strongest argument against Barack Obama, who has ObamaCare as his albatross.

Nor is an about-face on RomneyCare a viable option for Mitt Romney. He has already done too many other about-faces for the voters to be likely to trust him after another. He has painted himself into a corner.

Articulate Newt Gingrich might be the best Republican to go toe-to-toe with Obama in presidential debates-- and a lack of effective articulation has been the Republicans' big weakness for years. Try to name a Republican renowned for his articulation, besides Ronald Reagan, Theodore Roosevelt and Abraham Lincoln.

While Newt Gingrich is not at that level, he is definitely a cut above most Republican candidates in talking. He also represents a cherished moment in Republican history, when they took the House of Representatives for the first time in 40 years, as a result of Gingrich's "contract with America" election strategy.

But that was back in the 1990s, and many younger voters today may have no idea what that was all about. Worse yet, former Speaker Gingrich has shown too many signs of opportunism -- including his wholly unnecessary swipe at Republican Congressman Paul Ryan's attempt to bring some fiscal sanity to Washington-- to be trusted.

His own staff should know him better than the rest of us. Their recent resignations should mark the end of a very promising career that did not live up to all its promises. Even so, Gingrich performed a real service to the country as Speaker of the House of Representatives, which brought federal spending under control and produced what the media chose to call "the Clinton surplus."

Among the other announced Republican presidential candidates, former governor Tim Pawlenty of Minnesota talks the most sense and shows the most courage. When you tell people in a corn-producing state like Iowa that you want to cut back on Ethanol subsidies, that takes guts, because Iowa will also produce the first results in next year's primary campaign season. And first results, like other first impressions, carry a lot of weight.

But somebody has got to talk sense about our dire economic problems-- and it is painfully clear that Barack Obama will not be that somebody. The fact that Pawlenty has put his neck on the line to do so is a big plus.

Tim Pawlenty cites his track record to back up his statements. That includes reducing Ethanol subsidies when he was governor of Minnesota and cutting the growth of state government spending from just over 20 percent a year to under 2 percent a year.

Governor Pawlenty fought Minnesota's transit unions over runaway pensions and hung tough during a long strike. "Today," he says, "we have a transit system that gives commuters a ride, without taking the taxpayers for a ride."

Some fear that Governor Pawlenty doesn't have the charisma and fireworks rhetoric that they would like to see in a candidate. Charisma and rhetoric are what gave us the current disastrous administration in Washington. Charisma and rhetoric gave people in other countries even bigger disasters, up to and including Hitler.

Politicians and the media may want a candidate with verbal fireworks but the people want jobs. As Tim Pawlenty put it: "Fluffy promises of hope and change don't buy our groceries, make our mortgage payments, put gas in our cars, or pay for our children's clothes."
5863  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Political Economics: Paul Ryan - the government-knows-best crowd got it wrong on: June 14, 2011, 12:04:01 PM
There are three main reasons why the president’s policies have made this recovery weaker than usual:  Regulatory uncertainty, tax uncertainty, debt uncertainty - Ryan nails it.  I like that he puts excessive regulations front and center and that uncertainty coming from the public sector is a major cause of the inaction from investors in the private sector.  Also, more people need to equate spending with debt.  Everything we spend at the margin - beyond the first two and a half trillion and beyond essential government functions like funding the court system and national security - is permanent debt, a burden that grows literally with the magic of compound interest.

Obama's Economic Experiment Has Failed -- Time to Get Back to What Works

By Rep. Paul Ryan
Published June 13, 2011

A flurry of recent economic news – especially the May jobs report – confirms what many have feared for some time: This president’s leadership deficit has caused a disastrous jobs deficit, and where he has led, his policies have made things worse.

The president clearly inherited a difficult fiscal and economic situation when he took office. But his response to the crisis has been woefully inadequate. The president and his party’s leaders have made it their mission to test the hypothesis that more government spending and greater government control over the economy can jump-start a recovery better than the private sector can.

That experiment has failed. The stimulus spending spree failed to create jobs. Massive overhauls of the financial sector and health-care sector are fueling uncertainty and hindering our recovery.

House Republicans are charting a new course with a better plan – starting with a budget that frees the private sector from regulatory uncertainty, punishing tax increases, and the crushing burden of debt that is weighing on this recovery. But making progress on this plan will require leaders in Washington to relinquish the idea that government knows best, and many just don’t seem ready to face that reality.

The May jobs report was yet another reminder that the government-knows-best crowd got it wrong. When he came into office, the president’s economic team predicted that a stimulus bill of unprecedented size and scope would hold unemployment below 8 percent and steadily lower it to 7 percent by the first quarter of this fiscal year.

These estimates weren’t just off by a little bit – they completely missed the mark. The jobless rate went all the way up to 10.1 percent, never fell below 8.8 percent, and has now ticked back up to 9.1 percent. Private-sector hiring continues to stagnate. The cost of gas and groceries continues to rise. And the national debt continues to climb, casting a long shadow over economic activity and job creation.

This recovery pales in comparison to past, private-sector-led recoveries. Unemployment today has fallen by just 1 percentage point from its recessionary peak. By contrast, unemployment at the same point in the past ten recoveries dropped by an average of 5 percentage points in past recoveries. The dismal jobs record underscores the fact that the Great Recession is far from over for millions of American families.

There are three main reasons why the president’s policies have made this recovery weaker than usual:

1. Regulatory uncertainty: After the stimulus passed, the president turned his attention immediately to costly overhauls of the nation’s financial and health-care sectors. These overhauls needlessly transferred more control over America’s economy to government bureaucrats in Washington, without fixing the problems they were intended to address. The transfer of so much power to the arbitrary dictates of federal regulators has made it hard for businesses to plan for the future with confidence, and things will remain this way until these laws are replaced with real reforms.

2. Tax uncertainty: The president’s ad hoc tax policies, with a mix of tax hikes on job creators and temporary rebates for others being the hallmarks of his approach, have left businesses in the lurch. Moreover, the president’s new health care law imposes a crushing $800 billion tax hike, and he continues to threaten businesses and families with higher rates in the future, even as he dithers on his vague promise to address America’s uncompetitive corporate tax rate, which is the highest in the developed world.

3. Debt uncertainty: The president has not put forward a plan that saves Medicare from bankruptcy, even though nonpartisan experts tell us that this could happen in 9-13 short years unless we act. Each year that we fail to put our critical government health and retirement programs on a path to long-term solvency, we are making trillions of dollars of unfunded promises to future retirees. We are already borrowing 40 cents of every dollar we spend, and Washington’s inability to solve its spending problems is leading rating agencies such as Standard & Poors to downgrade our credit outlook. Government under this administration is failing at its number-one economic job, which is to create a stable, predictable environment for job creators.

By contrast, the Republicans have put forward a plan to tackle each of these problems head-on. Our budget, which we call The Path to Prosperity, reduces regulatory uncertainty for businesses by repealing the new health care law. It reduces tax uncertainty by promoting low, stable rates and clearing out loopholes and deductions that go primarily to the well-off. And it reduces debt uncertainty by dealing with our long-term unfunded liabilities, saving Medicare from bankruptcy, and putting us on a path to pay off the debt.

This debate comes down to one big philosophical difference: Who should we put in the drivers’ seat when it comes to jobs and the economy: government bureaucrats in Washington, or a vibrant private sector freed from uncertainty?

The president’s economic experiment has failed. It is time to get back to what we know works: empowering free citizens with the tools they need to prosper. To close the alarming budget deficit and the painful jobs deficit, we must first erase Washington’s leadership deficit by providing real solutions for a real recovery.

Rep. Paul Ryan is chairman of the House Budget Committee and represents Wisconsin's 1st district.
5864  Politics, Religion, Science, Culture and Humanities / Politics & Religion / 2012 Presidential: NH Debate June 2011 on: June 13, 2011, 10:55:54 PM
GOP Debate Recap
June 13, 2011 Posted by John Hinderacker,

"The New Hampshire debate is winding down, and my general impression is that all of the candidates did pretty well. Mitt Romney was a winner, as he came across like a senior statesman and none of the other candidates attacked him. All apparently were obeying Reagan's 11th commandment. Michele Bachmann shone early, not so much during the second half, but on the whole undoubtedly generated some excitement. Newt Gingrich reminded us how good he can be in this debate format. Rick Santorum and Herman Cain did fine. Ron Paul, whom in general I don't like, was collegial and made several positive contributions. Tim Pawlenty--my favorite, as our readers know--did fine, but in my judgment didn't break out.

The overall impression, I think, was of a united front, determined to make Barack Obama a one-term president. That is a good thing. There was a basic conflict of interest between the candidates and CNN, which hosted the debate. The candidates wanted to talk about the economy. CNN led with 20 minutes or so on the economy, then shifted to the social issues, immigration, foreign policy, etc. One could sense television sets switching off across America as the evening wore on. So I don't think the debate represented a breakthrough for any of the candidates individually, with the possible exception of Michele Bachmann--time will tell--but it was a pretty good night for the cause of conservatism and constitutional government."
5865  Politics, Religion, Science, Culture and Humanities / Politics & Religion / 2012 Presidential on: June 13, 2011, 10:59:21 AM
Responding here to the Herman Cain points from tax policy.  Agreed that he is a great American with a calm center and amazing courage.  I would be very proud to have him as President.  Huckabee I think took the Fair Tax banner out of opportunism and Cain is taking it out of conviction. 

Frankly though, the fair tax works if what we needed was about a 10% tax, not 30% sales tax plus the state tax.  I think he is also implying we get there by moving forward with spending cuts and income tax rate cuts first, and then gradually change hearts and minds.  He is not however charismatic enough to ever get 80% support for repealing all income taxation on the rich. I know hateful, liberal thought way too well for that. We already repealed income taxation on the bottom 50%, so what do they have to gain?

In the context of unattainable, I find the push now in a time of national crisis for what is foreseeably unattainable to be counter-productive.  I would actually like to see these candidates move toward consensus rather than differences on key issues if we hope to unite, win the election, win a mandate and accomplish anything meaningful. MHO  smiley
5866  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Islam in America: A Peaceful Patriotic Muslim on: June 13, 2011, 10:24:23 AM
By way of Powerline, this is a very refreshing look at what immigrants can become and appreciate:

2 minutes and 40 seconds well spent.  First Muslim, first immigrant Miss USA honors Ronald Reagan.
5867  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Tax Policy: Cain on Fair Tax on: June 13, 2011, 09:50:22 AM
"The man owns the topic on a level I have not before seen."

Did he make a convincing case, in a climate of 48% Obama support and 53 Dem Senators that we are on the verge of getting 80% for REPEALING the income tax altogether by constitutional amendment - in time to save the republic? 

Currently we are arguing to the point of almost civil war over when the rich should be raised from 35% to 39% and you believe we can get 80% support for zero direct tax on all income earned by the rich? 

Another candidate just suggested ending a couple examples of double taxation on certain incomes and the world of centric politics and punditry has gone berserk.
 Gigot: Welcome to "The Journal Editorial Report." I'm Paul Gigot.

First up this week, the FAIR Tax. It's the proposal to replace all federal taxes, including income and payroll taxes, with a 23% national sales tax. Presidential candidates have run on it and lost in the past, most notably Gov. Mike Huckabee in 2008. And this time around, it's businessman Herman Cain who has picked up the FAIR Tax issue.

I spoke to Cain earlier this week and asked the GOP hopeful if he really thinks he can win the nomination by proposing a 23% tax on everything that Americans buy.

Cain: The answer is yes, for the following reasons. First of all, it replaces the federal income tax. It replaces the FICA tax that's currently being taken out. And we'll still raise the same amount of money. Secondly, the FAIR Tax moves taxation from a decision by the government on your income to a decision made by the consumer based upon that purchase behavior. And so that's one of the big advantages. Now, the other big advantage is that we'll raise the same amount of revenue with that 23%, because the consumption base is bigger than the income base.

Gigot: But the Bush tax commission, when they looked at it--

Cain: Yes.

Gigot: --in the last decade, said actually, the tax rate you'd have to have to raise the same amount of revenue is probably about 34%.

Cain: That's because they changed the assumptions in the bill. Here's what they did: They went back and tried to create a hybrid of trying to save the mortgage interest deduction because they think that that's like, you know, a pacifier for consumers. No.

Gigot: And you'd get rid of that? Get rid of all of it?

Cain: All of that would be gone. So you--and they changed the assumptions,. That's why they came up with that number. That's why they--because they tried to create a hybrid. If you look at HR 25 and go by the assumptions--

Gigot: That's the proposal in the House.

Cain: That's the proposal in the House. It's been introduced there since 1999, and it's still there. Look at what's in the actual legislation, and don't change the rules. The 23% would raise the same amount of money.

Gigot: But here's the problem a lot of conservatives have, which is a political problem. You've got the 16th Amendment, which said you could have the income tax.

Cain: Yes.

Gigot: In order to get rid of the income tax, you probably have to repeal the 16th Amendment.

Cain: Correct.

Gigot: So if you offer a national sales tax without repealing the 16th Amendment, aren't you going to get both?

Cain: No. In the legislation there is a clause that says that the FAIR Tax cannot go into effect until the 16th Amendment is repealed. So that puts pressure on the states and on Congress to repeal the 16th Amendment before the FAIR Tax, the national consumption tax, can go into affect.

Gigot: What makes you think that the American public is ready to hear a candidate, support a candidate, who supports what, let's face it, is a very radical change? Because you throw it the entire tax system. When other Republican candidates at the federal level, like Jim DeMint in South Carolina--

Cain: Right.

Gigot: --or certain Congress--congressional candidates have supported it, the Democrats have gone after it and said, "They want to raise the price of everything you buy--your home, your car--by 23%," and it's hurt them. How would you counter that argument?

Cain: The difference is, I can defend all of the lies, all of the misperceptions and all of the distortions about the FAIR Tax, and I'm willing to take that battle on. That's the reason why. Because what has happened--it does get demagogued. But then when you explain to the American people that it not only eliminates the withholding tax for both FICA as well as the payroll tax, but that it also eliminates the IRS and the costs that we have there, it--we will only need to spend 10% of what we spend on the IRS--you know, those people that abuse us and harass us?

Gigot: Right.

Cain: Well, they go away. They have to find new jobs. And trust me, they're smart enough to find new jobs.

Gigot: I guess the other concern that people have is, if you impose a tax that size on everything you buy, a lot of people are going to say, "You know what, I don't want to pay another 23%, 25% on my car."

Cain: It's--

Gigot: "Let's do it on the black market." And you drive a lot of those sales underground, and you'll still need somebody like the IRS for enforcement, won't you?

Cain: No. Here's why. First of all, the 23% is on new goods. So it's not on used cars and used homes or used goods. Yes, but you're going to pay it on everything else. Now, it could cause some people to try and buy it on the black market to get around it.

Gigot: Sure.

Cain: What's happening today? We have probably more underground activity going on today because illegals, who do everything on a cash basis, they are not paying taxes. People who come here to visit and do Christmas shopping from overseas, they are not paying any taxes. You've got the illegal activity that goes on in this country, that's money being left on the table.

And here's one of the big ones right here. What we spend collectively just to comply and file with the current tax code: $430 billion a year. That works out to the cost--to pay a dollar in taxes, that works out, according to analysis by Art Laffer, 30 cents to pay that dollar. The American people could keep that 30 cents.

Gigot: But Art Laffer long believed in a flatter system, a flat tax.

Cain: Yes, yes.

Gigot: A lot of Republicans have proposed that in the past, and some are now. Why--and, you know, go for, say, a top rate of 25% and then a lower rate, say, of 10%. You could fiddle with the rates, but something like that. Why not play it more politically safe and go for that, because you don't have to make the case that you have to repeal the 16th Amendment, which you know is very, very difficult to do?

Cain: The reason is, if you go with something that's still going to be taxed on income and you keep the 16th Amendment, the bureaucrats and politicians can't help themselves, it's going to grow back again. Remember, Reagan reduced down the number of brackets and all of that. Look what it did. It grew right back. Why?

Gigot: But couldn't you also raise--the politicians will raise the size of the sales tax.

Cain: Yes. That's a possibility, but here is the safeguard. In the legislation, HR 25, it requires a supermajority vote of the United States Senate in order to raise it. And I think if they tried to do that and sneak it past the American people, they won't be able to sneak it past, so that's another safeguard. The American people would know. Right now, Paul, lobbyists are able to get tax favors in the bills, and the American people never know about it. The current tax code allows politicians to select winners and losers. We need to get rid of that. And once we get rid of the tax code, we're going to eliminate 50% of the lobbyists who are trying to get those favors in the tax code.

Gigot: And you think you can sell this to the Republican primary electorate when Mike Huckabee couldn't do it successfully in 2008. He ran on the FAIR Tax.

Cain: Yes, he did.

Gigot: And he didn't win the nomination.

Cain: Here's the difference.

Gigot: Why is it going to be different?

Cain: Here's the difference. First of all, this is Herman Cain. All right, let's start there. I'm proposing a two-phase boost to our economy. Phase 1 is what we need to do to get things going while I educate and inform the public about the nuances and the advantages of the FAIR Tax. I'm not going to try to do that right away. Phase 1--

Gigot: Will be a tax cut.

Cain: --will be tax cuts. It'll be suspending the tax on foreign profits. It'll be a real payroll tax holiday. And then make those--make those--other than the tax holiday, make them permanent so we can remove this uncertainty. So we'll do that in order to boost the economy and then educate the public.
5868  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential on: June 13, 2011, 09:48:56 AM
Noonan is right on a couple of those counts.  Romney presents as Presidential. He is more network news anchor than the people who actually have those jobs.  People like Pawlenty as an example are more local in presentation, hence the 6% early support levels.

The Mormon story is old.  What are the deeply held religious beliefs of the current resident at the White House?  Nobody knows and only opponents care.  Romney's challenge is to go from a 23% frontrunner to becoming a candidate who will put the country on the right path and a candidate acceptable to all of the conservative movement. 

Early frontrunners sometimes end up as cabinet members in the new administration.
5869  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Political Economics: Restrain the public sector, Unleash the private sector on: June 13, 2011, 12:51:59 AM
A question posed recently: "You are the new president to be sworn in 1/2013. What policies would you want to dig us out of our economic crisis."
(I would like to see everyone in on this with their own plan.)

My plan:
Table of contents
a) Energize: Open up our own production and supplies of essential domestic energy sources
b) Healthcare: Repeal and Replace
c) Government Spending - Roll back and restrain the growth of spending
d) Regulations -  eased, re-evaluated and reauthorized
e) New tax Code, on one sheet of paper
f) Value the Dollar
g) Reform Entitlements, really!
h) Employment Mentoring:  Welfare reform revisited
i) Unleash Innovation - the result of the above policies

a) These all need to be virtually simultaneous, but energy reform is first because of the long lead times.  Must send a strong signal now. The energy plan is move forward on all fronts.  Get the best and the cleanest with the safest possible techniques.  ANWR, yes.  Fill the Alaskan pipeline before that trickle peters out altogether.  Offshore, yes, but learn from everything that happened in Deepwater. Natural gas, yes, but with the smartest real protections an minimal releases.  Nuclear, yes, but learn everything we can learn from Daichi Fukushima.  Coal, yes.  Find its cleanest and most cost effective use and let's permit and start building.  If any part of CO2 emissions can be sequestered cost efficiently, sequester them.  Natural gas hybrids, yes, but in a free private sector.  Conservation, yes, but not at the expense of individual liberty or choking our economy. 

b) Healthcare: Repeal Obamacare, get those new taxes, expenses and new regulations off the table now.  Implement the best of the Republican proposals updated from last year that both parties can agree to.  Do it all in one vote.  Pre-existing condition reform, universal availability of coverage, malpractice and liability reform, and the advance of making competitive plans available across state lines are things we likely can all agree on once the government centric system is taken off the table.

c) Government Spending - rolled back and restrained.  The Ryan Plan referred to a roll back to 2008 levels.  Spending is 3.8 trillion, revenues are 2.5.  We can't close the gap only with cuts, and we can't close it without meaningful cuts.  Set targets, set priorities and make meaningful cuts, then really truly curtail the overall growth of spending - to a rate no more than half the rate of growth of production and revenues - until the gap is closed.  Put spending on a downward path to 3 trillion until the trillion and half dollar Obama deficits are down to 0.5 trillion.  Then close the rest with economic growth to full private employment accompanied with sustained spending restraint.

d) Regulatory easing.  Put moratoriums, delays on ALL non-health/safety/essential regulations.  Delay and re-authorize where necessary.  The limited discussion of tax and spend to balance the budget at full employment is fatally flawed.  Federal taxes are only a part of the government caused burdens on employment and production.  Shine the light on ALL of it.  One simple reform to help create new jobs would be to allow startup employers to issue 1099's to all new hires in their first calendar year.  The market is tough enough out there without having to instantly learn every rule about payroll deductions, withholdings, forms, compliance and the like.  The new entity has enough to do jumping out of the gate.  Do we want startups or DON'T WE?

e) Tax reform.  My plan would eliminate deductions with the exceptions ofother taxes paid, half of home mortgage interest paid and half of charitable contributions made. I would set a minimum and a maximum tax rate, let's say 6.25% minimum and 25% maximum.  Everybody is in.  Set the limit point and make rates continuously variable in between.  Every dollar gets taxed and no dollar of income shall receive cruel or unusual punishment. Make up for lower rates with higher velocity.  Lower the corporate rate from 35 (highest in the world) to 22.5%, just below the OECD average.  Lower inheritance tax double taxation from 55% to 7.5%, but make it apply to all people and all dollars. Lower the capital gains rate from 15% to 12.5%, or introduce indexation of all gains to inflation.  (States need to index capital gains too.)

f) Value the Dollar.  Accompany our repair of competitiveness across the globe with the tying of our supply of total dollars to the total supply of goods and services in the economy, imagine that!  Prohibit Federal Reserve inflation targets of more than 0.5% per year and end the flawed 'dual mission' of the Fed.  The Fed's mission is to protect and preserve the value of our currency.  That's it.

g) Reform entitlements - really!  We already know how, so do it.  Pawlenty spelled it out.  Raise the age, but not for the people already in or close.  Cap the escalators, but not for the people without other means.  Get the reforms done and let the markets know we are serious.  It is unacceptable that every man, woman, transexual, child and fetus owes $560,000 per person right now in unfunded liabilities.

h) Employment mentoring.  Welfare reform revisited.  Set a national goal that no one goes on assistance or stays on any of it without a plan for getting off of it and that plan with all its action items gets reviewed every month.  I would offer to the outgoing President and First Lady immediately the unpaid positions of national employment mentoring leaders, in charge of getting the best and brightest from all professions to agree to mentor at least one person until all citizen recipients of assistance are matched up and on a plan to develop themselves, produce and contribute to the best of their capabilities. 

i) Unleash innovation!  This is the result of the above.  Whatever is stopping us from innovating better than ever and better than anywhere else in the world, fix it.  Decline is a choice.  Stop choosing it.  Set goals, make the hard choices and move this economy forward - like we've never seen before.
5870  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Economics - John Taylor of Stanford writes about the Pawlenty Plan on: June 12, 2011, 10:23:52 PM
"You can see how the types of pro-growth policies in the [Pawlenty] plan would work toward the goal by reducing spending growth enough to balance the budget without tax increases and thereby remove threats of a debt crisis; by lowering marginal tax rates to spur hiring and job growth; by scaling back unnecessary new regulations which impede private investment and higher productivity, and by restoring sound monetary policy to remove uncertainty about inflation or another financial crisis."
Note: I looked him up because Gov. Pawlenty referred to him this morning on Fox News Sunday

Prof. John B. Taylor
Mary and Robert Raymond Professor of Economics at Stanford University
George P. Shultz Senior Fellow in Economics at the Hoover Institution
Home page:

Saturday, June 11, 2011
Why Not Go For 5% Growth?
Some skeptics have complained about the 5% national economic growth target put forth by former Minnesota Governor Tim Pawlenty in his speech this week about his economic plan. They say it can’t be done. But I think the goal makes a great deal of sense. It would focus policymakers like a laser beam on the great benefits that come from higher growth and on the pro-growth policies needed to achieve it. As with any goal, if you take it seriously, you’ll choose policies that work toward that goal and reject those that don’t.

As stated in the speech, “5% growth is not some pie-in-the-sky number.” One way to see why is by dissecting the number into its two parts using basic economics. As we teach in Economics 1, economic growth equals employment growth plus productivity growth. Productivity is the amount of goods and services that workers produce on average in a given period of time. Thus, higher economic growth can come from higher employment growth or from higher productivity growth. Now consider some examples of average growth rates over the next ten years.

First, look at employment growth. Given the dismal jobs situation, that’s the highest priority. Currently the percentage of the working-age population (age 16 and over) that is actually working is very low at 58.4 percent. In the year 2000 it reached 64.7 percent, so that is at least a feasible number. Raising the employment-to-population ratio to 64.7 means an employment increase of 10.8 percent (64.7-58.4/58.4 = .108) or about 1 percent per year over 10 years, even without any growth of the population. Adding in about 1 percent for population growth (from Census projections), gives employment growth of 2 percent per year.

Now consider productivity growth. Since the productivity resurgence began around 1996, productivity growth in the United States has averaged 2.7 percent according to the Bureau of Labor Statistics. So numbers in that range are not pie in the sky. As Harvard economist Dale Jorgenson and his colleagues have shown, the IT revolution is part of the explanation for the productivity growth, and, if not stifled, is likely to continue, as is pretty clear to me as I sit a few hundred yards from Facebook and other high-tech firms.

Now if we add the 2.7 percent productivity growth to the 2 percent employment growth, we get 4.7 percent economic growth, which is within reaching distance of—or simply rounds up to—the 5 percent target set by Governor Pawlenty. Thus, five percent growth is a good goal to aspire to, whereas 3 or 4 percent would be too little and 6 or 7 percent too much. Of course, one can fine-tune these calculations--for example, by estimating changes in hours per worker or the difference between nonfarm business (which BLS productivity numbers refer to) and total GDP--or raise questions about demographic effects on the employment-to-population ratio. And one could use different examples, perhaps lower employment growth and higher productivity growth, but the basic point about the goal would be the same.

You can see how the types of pro-growth policies in the Pawlenty plan would work toward the goal by reducing spending growth enough to balance the budget without tax increases and thereby remove threats of a debt crisis; by lowering marginal tax rates to spur hiring and job growth; by scaling back unnecessary new regulations which impede private investment and higher productivity, and by restoring sound monetary policy to remove uncertainty about inflation or another financial crisis.
Posted by John B. Taylor at 1:34 PM
5871  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Pawlenty Tax Plan - WSJ on: June 12, 2011, 02:56:59 PM
Here is more of what Crafty posted.  I would like to come back to this to discuss.  I watched Chris Wallace grill him today.  He might as well have gone on Bill Maher's show to explain it.

I would ask his opponents like Obama how they will balance the budget without growing the economy, or how they will grow the economy without improving the investment/employment climate.  We can argue over the details, but something like this or at least part way in this direction will be required to snap out our current morass.  Pundits can't seem to say the word, but he is mostly trying to cut double and quadruple taxation.

Tim Pawlenty's call for an economic-growth plan built on tax cuts has raised concerns among Republicans in Congress who worry the presidential candidate's message could muddy their immediate quest to slash spending and curb the deficit.

The proposal from the former Minnesota governor, put forth Tuesday in Chicago, comes as Republicans and Democrats in Congress battle over ways to slash the federal deficit as part of a deal to raise the national debt limit. The Treasury says it will run out of ways to stave off a default Aug. 2.

That standoff has focused attention on cutting government spending, with some Democrats saying higher taxes are needed. Less immediately germane, Republicans say, are immediate calls for steep tax cuts.

Tim Pawlenty's call for steep tax cuts is causing unease among Republican Party lawmakers in Congress whose most immediate interest is focusing on deficit-cutting negotiations with the White House. Neil King explains.

Mr. Pawlenty's proposal "is different from where most of us are focusing our attention now," said freshman Utah Sen. Mike Lee. "We see this as a spending problem, not a revenue problem."

Mr. Lee, who said he applauded the spirit of the Pawlenty plan, cautioned against pushing deep tax cuts "in the midst of a significant economic downturn."

The lukewarm response to Mr. Pawlenty's plan stems as much from differing immediate priorities as significant policy splits, with 2012 candidates seeking to lay out a long-range philosophy while lawmakers tackle budget talks with the White House.

Pawlenty spokesman Alex Conant said the governor has proposed a long-term plan, not one designed to address the immediate fight over the debt ceiling.

Democrats, including aides to President Barack Obama, blasted the plan as unrealistic and called it a reprise of the Bush-era tax cuts that swelled the deficit but did little to create jobs or boost growth.

Mr. Pawlenty won praise from some conservatives with his plan to cut corporate and individual taxes and permanently end capital-gains taxes and taxes on savings and inheritances. The plan envisions average annual economic growth of 5% over 10 years, compared with 1.7% during the past decade and 3.42% during the 1990s.

Under current projections, Pawlenty aides say, tax cuts would reduce federal revenue by $2 trillion over 10 years. But Mr. Pawlenty envisions largely unspecified spending cuts of at least double that sum, and a balanced budget within a decade.

Rep. Paul Ryan (R., Wis.), the House Budget Committee chairman, has led a House GOP push for 25% top tax rates. He said he was "excited" that Republican presidential candidates were taking up the cause. Even the bipartisan fiscal commission appointed by President Obama last year recommended top rates as low as the mid-20s, Mr. Ryan said.

"What is happening is a center-right coalition is developing here, joined by moderate Democrats, and it's calling for lower rates…and a broader base," Mr. Ryan said. "I'm a party to that, I agree with that."

If Republicans can succeed in taking back the Senate and the White House, "I think we'll get that," he added.

Other Republicans gave the plan qualified praise, while also expressing worries about diverging from a sharp anti-spending, anti-deficit platform going into the 2012 election. The GOP regained control of the House last year on promises to curb government spending and amid dire warnings over the swelling national debt.

Sen. Lindsey Graham of South Carolina said he supported "entrepreneurial tax plans" like the Pawlenty proposal, but added: "If you don't have some spending [control] mechanism, it's not going to work."

Sen. Orrin Hatch of Utah, the top Republican on the Finance Committee, called the plan "feasible," but said "we'd have to do a lot of other things as well." Mr. Pawlenty wants all corporate taxes slashed to 15%, from 35% now. Sen. Hatch said 25% is "probably more achievable."

Douglas Holtz-Eakin, a former director of the Congressional Budget Office and former adviser to John McCain's 2008 presidential campaign, said his biggest concern with the Pawlenty plan was its suggestion that 5% growth is possible for a decade.

"Five percent for 10 years is just outside the realm of historical experience," he said. "Ambitious is the least of the words…to describe it."

The 5% growth figure is aspirational but not out of reach, said Mr. Conant, the Pawlenty spokesman.
5872  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / America's Inner City: Living in 'poverty' on: June 12, 2011, 02:26:14 PM
I took this line from a great ya post on Pakistan:

"The government [of Pakistan] uses the World Bank’s definition of poverty, which is any person earning less than $1.25 per day."

I wonder if the US Census Bureau is aware of this definition.  Our definition includes people enjoying cable tv, unlimited free healthcare, free food, shelter and clothing, 2 cars, a full surround sound theatre, a CD/DVD collection, a high end stereo and free air conditioning.  All that and you can still be called homeless and living below the poverty line.

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

    * Fortysix percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a threebedroom house with oneandahalf baths, a garage, and a porch or patio.
    * Seventysix percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
    * Only 6 percent of poor households are overcrowded. More than twothirds have more than two rooms per person.
    * The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
    * Nearly threequarters of poor households own a car; 30 percent own two or more cars.
    * Ninetyseven percent of poor households have a color television; over half own two or more color televisions.
    * Seventyeight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
    * Seventythree percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
5873  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential - Michele Bachmann on: June 11, 2011, 11:29:47 PM
"If I'm in, I'll be all in"

Respectfully, I don't think that is fully true.  I don't think she will give up her house seat for a long shot which means she would have to either win or be out early.  MN caucuses are usually the same day as so-called super-Tuesday.  Call me pessimistic, but I don't think she will allow herself to lose in her home state and then need to build back the momentum to hold her own seat which is hugely expensive because a) she is a target and lightning rod for all national, liberal money, and b) one has to blanket all of the Twin Cities television market covering at least 3 other districts just to reach the part of her district that touches the edges of the metro area.
5874  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Homeland Security: Cell phones on airplanes on: June 11, 2011, 11:07:40 PM
Great joke!  Just wanted to add an opinion to the safety of the cell phone on the airplane question.

I asked a family member with degrees in avionics about it a few years back.  He basically said no.  If navigation equipment could be confused by a cell signal you are already in big trouble.

From my technology past I would point out that all the sensitive wiring within the plane can be done in fiber optics with zero susceptibility to all electrical interference.  To the extent they aren't doing that yet, it is because they don't believe they need to, not because it isn't available:

It is pretty hard to imagine a wireless code division multiplexed cell signal with a passenger telling her husband the arrival time received by the navigation system as a command to switch the plane in or out of auto-pilot.  If true, it is time to stop flying.

If the issue is terrorists sending a disrupting signal, asking passengers to end their calls doesn't fix that.
5875  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential on: June 10, 2011, 10:42:25 AM
And she is running for... nothing.

Wouldn't it make sense to simultaneously release the emails of all politicians and elected officials over the last 10 years, instead of just one.

Equal protection under the law is a concept so lost I have to search my own posts to find it mentioned.  Did Rahm, Axelrod and Obama use government email, send to government emails, while on government payroll?  Where are those posted and searchable?  How about the JFK files of the House Select Committee on Assassinations locked away until the year 2029.  We can't handle the truth?  It's too early? No one asked??

The targeting of Palin is based on one thing - hatred.  So let's encourage it?
5876  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential on: June 09, 2011, 11:30:04 PM
'I heard Huntsman on Hugh Hewitt yesterday for few minutes. FWIW, I liked what I heard in that limited amount of time."

He is saying the right things.  He knows he is running for the nomination first, not the Presidency.  All the Governors have moments in the past of favoring the liberal or moderate side of issues like healthcare, climate change etc. but I think the nominee will be one of the Governors: Romney, Pawlenty, Huntsman, Perry? Palin? so people will have to sort it all out.  Add Giuliani to that mix - I'm sure NYC is larger than many states.

Put me in the camp of Mrs. GM.  Whichever one of these folks wins the R nomination will win my vote  over Obama.  Let's not lose sight here of the co-equal legislative branch.  If Obama can win, Dems could also retake the House.  If it is an R. year, they might win the House plus 51 or more senate seats, but not 60.  Then the big fights over legislation will all be held in a divided senate no matter what RINO, Dem or conservative wins the White House.

That is why it matters to win a mandate, not just an office.  2008 was an election about vagueness, hope and change.  This needs to be an election about clarity.  This is shaping up to be a contest of ideas and diametrically opposed directions more so than ever before in our history - just like they say almost every 4 years.
5877  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2012 Presidential on: June 09, 2011, 04:14:25 PM
The Reuters Ipsos poll is bizarre.  They list how most (84%) of their respondents are registered voters, totally unverified I'm sure, but never use the term 'likely voter'.  They are only claiming that they were reachable by telephone.  Polls use the term margin of error to mean statistically sampling number error, but they make other errors as well IMO.  They say unchanged in a month but everyone alive knows that during that month Obama earned and lost a huge bin Laden kill bump.  I notice from the Ipsos website their main strength is 'global citizen' polling.  Whatever that is,I can't think of anything less accurate.

I watch the RCP (Real Clear Politics) average of polls, also flawed.  It still has net positive for Obama since the bin Laden operation but has been falling by about a point a day lately.  The general rule is that an incumbent below 50% is vulnerable and as that falls significantly below 50% he becomes poison to the candidates in his party running in swing districts.  At about 48-49% he is right on the edge - and falling.  If the economy is still in the doldrums throughout the summer with no economic growth in sight, I would expect his real approval numbers to drop to low 40s/ high 30s, approaching where Bush was when he gave up leading.

My prediction that Obama won't be the Dem nominee still looks wrong today, but... that assumes that Obama still has 2 or 3 tricks up his sleeve of reasonably good governance in order to appear competitive through to the convention in Charlotte starting Labor Day 2012, nearly 15 months away.  We shall see.
5878  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Issues in the American Creed (Constitutional Law and related matters) on: June 09, 2011, 01:01:16 PM
"Obama killed the War Powers Resolution
« Reply #967 on: June 07, 2011, 10:02:16 AM »"
(From Bigdog - Political Economics)

How could anyone confuse our presence in Libya with war.  Obviously it is only a kinetic stationing of military equipment and personnel...

Let's say a President believes the War Powers resolution to be unconstitutional, what is the proper way to challenge it?  Defy it and let congress take you to court?
5879  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Pathological Science: Man made tornadoes on: June 08, 2011, 11:46:25 AM
I came to this alarmist storyby way of this title at Real Clear Politics:
Bad Weather Is Due to CO2 Emissions - Elizabeth Kolbert, The New Yorker

At the liberal link I found no new science or logic linking manmade CO2 to Joplin than I do linking CO2 to high of 78 and sunny here today, photo update below confirming what I posted in April that the ice and snow would be gone and the pianese in full bloom by the second week in June, like clockwork - with or without increases levels of trace element components of greenhouse gas.  Tornado hitting my property aside, storms here are no worse so far than 24 years ago according to my own lying eyes.

5880  Politics, Religion, Science, Culture and Humanities / Politics & Religion / 2012 Presidential - Pawlenty economic plan on: June 08, 2011, 11:18:13 AM
Further coverage of what Crafty posted yesterday, Tim Pawlenty answers the challenge posed on the board - what would you do Jan 2013 to turn this around.  I disagree on a few points of detail but this is the first that actually embraces the concept that economic growth is the answer.
Among GOP Presidential contenders, Tim Pawlenty is offering the most ambitious reform agenda so far, and his economic address yesterday continued the trend. While details remain to be filled in, the former Minnesota Governor is rightly focusing on a growth revival that ought to define the 2012 campaign.

Most notable in symbolic political terms, Mr. Pawlenty proposed what he called the "big, positive goal" of growing the U.S. economy by 5% a year over the next decade. His policy mix is centered on building a durable expansion and boosting middle-class incomes, and his speech was notable for its optimism, avoiding the austerity temptation that traps many Republicans.

A Pawlenty spokesman told us the 5% target is realistic and achievable, and it's true that the economy grew 4.9% on average between 1983 and 1987, and nearly 4.7% between 1996 and 1999. Yet such long booms are rare in developed economies and we can't recall one that lasted 10 years.

The goal is still worthy as an aspiration, especially amid the current recovery that should be far stronger after a long and deep recession. The recovery has reached 5% only in the last quarter in 2009, and that was mostly the result of businesses rebuilding inventories that had been cut to the bone. Growth has since slowed to 2% or below, failing to reach cruising speed despite (or in our view because of) the entire liberal playbook of government spending, temporary and targeted tax incentives, new entitlements and regulation, and monetary reflation.

Mr. Pawlenty would extricate the economy from this government cul de sac by enhancing the incentives to work, invest and create jobs. He sketched out yesterday a Reagan-like tax reform of lower rates for individuals and businesses. The first $50,000 in individual income ($100,000 for couples) would be taxed at 10% and after that a top marginal rate of 25%. This would give a big lift to the small and medium-sized businesses that file under the individual tax code and create most new jobs. He'd also zero out taxes on capital gains, dividends and estates.

Mr. Pawlenty says that families earning under $50,000 would pay an effective income tax rate of 0%, because he would maintain tax benefits like those for mortgage interest or the child credit that use the tax code as social policy. Mr. Pawlenty is right not to buy into the liberal objection that tax reform must be revenue neutral according to scoring rules that assume no growth dividend, but minimizing tax credit carve-outs would raise revenue by making the tax code more efficient.

The Minnesotan is on firmer ground with his corporate tax overhaul, which would reduce the rate to 15% from the current 35% in return for cleaning out the warren of loopholes and special favors. Businesses will expand, enlarge their payrolls and repatriate overseas earnings. The added benefit is that most corporate welfare is dispensed through the tax code—so a flatter, simpler system will reduce political mediation of the economy and the resulting misallocation of capital. It is both a pro-growth tax policy and government reform.

Mr. Pawlenty would also limit Washington's damage by paring the regulatory overreach that has defined the last three years and by curbing spending over time to 18% of GDP (from 24% today), which is the historical revenue average and is also crucial for economic revival. One test for all of the candidates will be how they propose to reform Medicare and other entitlements that account for about three-fifths of federal expenditures. The economy won't improve until the political class restrains its appetites.

More problematic is Mr. Pawlenty's endorsement of a balanced budget amendment. Leave aside that changing the Constitution is (rightly) a very heavy political lift, and that short-term deficits can be useful, as in the 1980s to finance the defense buildup that helped to end the Cold War. The more fundamental problem is that a balanced budget rule can easily become an excuse to raise taxes, as it often has at the state level. Mr. Obama would gladly balance the budget at 24% of GDP, or more.

Mr. Pawlenty also touched on monetary policy, stressing "a strong dollar" as a proxy for stable prices. Inflation is the great thief of the middle class—even if it has so far showed up largely in food and energy—and Mr. Pawlenty wants to end the Federal Reserve's impossible dual political mandate for stable prices and maximum employment. The long-term effect of such engineering is often inflation and bubbles, and Mr. Pawlenty would be wise to educate voters about the Fed's role in fomenting the housing mania of the last decade.

The larger task for Mr. Pawlenty going forward is to put these policy choices into a larger economic narrative, explaining to voters why the prosperity of the 1980s and 1990s ended, how Mr. Obama's policies have damaged the recovery, and how his own policies will revive middle-class incomes. Now that Mr. Pawlenty has laid down his marker, what do his competitors have to offer?
5881  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Wolves, Dogs and other canines on: June 08, 2011, 11:05:18 AM
BD,  Great story.  Amazing dog trainers, not just dogs.  I've never been able to get the canine to wear the goggles much less jump from the plane.  smiley

5882  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: States Rights on: June 07, 2011, 11:17:52 PM
Seems to me that usage of the term 'states rights' really just means not a power of the federal government, and by state we are referring to the people in the state deciding an issue rather than the government.
5883  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Political Economics on: June 07, 2011, 09:08:12 AM
Cheers to Bigdog for coming through.  I would suggest everybody post their own plan before criticizing.  I will try to write and post by the end of the week.  That said, I offer these quick comments and one question.

cut 10% of the military budget, but would focus on military pork projects.  - agree

increase the Social Security tax by 5%.  - Clarifying, not 5 points higher, just 5% increase.  Rough numbers from memory.  If we are talking about the full FICA they used to call it, it is split into employee and employer halves.  For the self employed I think the self employment tax was .93 * 15.3% which is 14.3%.  Add 5%, new tax is 15%.  I don't personally agree, but acknowledge it is a very reasonable compromise between funding and cutting.

increase the age of retirement to 70, or perhaps even 72 - agree

welfare to work program.  Not only would it get people off of the govt. dole, it would increase the tax revenue.  - agree

cut non-military executive branch officials by 25%.  Smaller WH staff, EOP staff, and the like by either cutting the programs or eliminating them outright.  - agree

encourgage MOCs (members of congress) to limit their staffs, by matching the cuts I make in my staff.  - agree

Relatedly, govt. bureaucrats actually earn more than the private sector equivalents, on average.  I would cut retirement benefits, and institute a pay freeze for all federal employees for the first three years of their employment.  - agree

I would cut subsidies to farmers who don't grow food.  - agree

Let the chorus of boos and the spittle begin to fly.  - I hope not.
Question: The complaint from the left (ex: Krugman, Reich)  is that austerity is not stimulative.  Your answer to them?

5884  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Energy Politics & Science: $158 per month increase! on: June 06, 2011, 07:33:44 PM
Moving along to a story about energy prices hitting the pocketbook.  I believe this to be more a part of energy policy than monetary inflation, which may also be true.

Update: I must add that our energy policies are also driving up food costs and shortages.  Who could have seen this coming??

Gas tanks are draining family budgets

By JONATHAN FAHEY, AP Energy Writer May 27, 6:01 pm ET

NEW YORK – There's less money this summer for hotel rooms, surfboards and bathing suits. It's all going into the gas tank.

High prices at the pump are putting a squeeze on the family budget as the traditional summer driving season begins. For every $10 the typical household earns before taxes, almost a full dollar now goes toward gas, a 40 percent bigger bite than normal.

Households spent an average of $369 on gas last month. In April 2009, they spent just $201. Families now spend more filling up than they spend on cars, clothes or recreation. Last year, they spent less on gasoline than each of those things.

"We used to do it a lot more, but not as much now," ... "You have to cut back when you have a $480 gas bill a month."

As Memorial Day weekend opens, the nationwide average for a gallon of unleaded is $3.81. Though prices have drifted lower in recent days, analysts expect average price for 2011 to come in higher than the previous record, $3.25 in 2008. A year ago, gas cost $2.76.

The squeeze is happening at a time when most people aren't getting raises, even as the economy recovers.
5885  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Issues in the American Creed/Constitutional Law: Healthcare appeals arguments on: June 06, 2011, 07:21:05 PM
First, I see I have not answered all questions asked of me, probably because I don't know the answer...

This is a right-wing conservative editorial (Washington Times) covering new oral arguments on healthcare.  I don't know if this adds anything new to the discussion we've already had.  Just painfully working its way through the system.  Meanwhile the country has no idea what the law of the land is as different courts have already made opposite conclusions.  I suppose the Supreme Court has more pressing matters on their mind and their docket.

Audio from the courtroom:
Obamacare’s unlimited power
White House health care plan represents massive government expansion
By THE WASHINGTON TIMES     Thursday, June 2, 2011

The White House defense of Obamacare hinges on the claim that Congress essentially has unlimited power to force Americans to spend their personal money on a cause of the government’s choosing. Oral arguments before the 6th Circuit Court of Appeals on Wednesday made this all the more clear.

Administration lawyers argued that uninsured individuals can be compelled to buy health care coverage under the Commerce Clause of the Constitution. If that’s so, what else could Congress compel people to do? As Judge James L. Graham asked acting Solicitor General Neal Katyal, “Where ultimately is the limit on congressional power?” The question sounds rhetorical but is not.

The judicial high-water mark for advocates of federal management of personal economic activity was the 1942 case of Wickard v. Filburn. Roscoe Filburn was an Ohio farmer fined for the crime of growing too much wheat. Mr. Filburn insisted the New Deal-era crop quotas did not apply to his particular circumstances because he was growing feed for his chickens, not for sale. The Supreme Court declared that the Commerce Clause applied to non-commerce because “control of total supply, upon which the whole statutory plan is based, depends upon control of individual supply.” The notion that a farmer should be free to grow grain on private property for personal use was not compelling, given the court’s belief in the overwhelming benefits of a centrally managed marketplace. Since “as the result of the wheat programs” Mr. Filburn was able to sell his other crops at a price “far above any world price based on the natural reaction of supply and demand,” he should be thanking the government for usurping his freedom, not suing it. To the activist liberals on the high bench, farmer Filburn was simply an ingrate.

The pernicious logic of Wickard v. Filburn has been used to justify other examples of stretching the Commerce Clause, such as the assertion of federal jurisdiction over homegrown medical marijuana. In the 2005 case Gonzales v. Raich, the court reaffirmed that “Congress can regulate purely intrastate activity that is not itself ‘commercial,’ in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.”

The Obama administration is taking this a step further. The White House claims that the burden placed on the health care system by the uninsured justifies coercing them into action. The “class of activity” that undermines the regulation of the “interstate market” in health care is inactivity. Since there is no interstate commerce to regulate, the government mandates it.

That’s why Obamacare isn’t just a threat to the private health care system. It strikes at the very foundation of our nation. In our earliest days, Chief Justice John Marshall warned that if Congress can exercise powers that are in practice unlimited, then “written constitutions are absurd attempts, on the part of the people, to limit a power in its own nature illimitable.” It is “a proposition too plain to be contested” that the Constitution cannot be used to justify an act that destroys the very limits on which constitutional government is founded, he wrote. The courts should move expeditiously to throw out the president’s unconstitutional power grab.
5886  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Energy Politics & Science on: June 06, 2011, 07:00:35 PM
I hadn't thought of that - the new, west Germany.

Perhaps that is why France is so helpful in Libya.  Obama threatened going back to historic (1943) borders; Sarchozy believes those to be indefensible.
5887  Politics, Religion, Science, Culture and Humanities / Politics & Religion / The Way Forward for the American Creed: Balanced Budget Amendment, I was wrong! on: June 06, 2011, 06:41:20 PM
I have opposed the balanced budget amendment because it would do nothing to limit spending and likely require future tax increases to match growing spending.

I was wrong.  It's all in there!

Please read the text of the Senate Republican version with nearly all Senate Republicans as co-sponsors.  It limits spending to 18% of GDP.

This came to my attention through a Tom Daschle editorial opposing it.
(This didn't cut and paste very well with section nos, page nos and line nos.  Read it at the source link if you prefer.)
Proposing an amendment to the Constitution of the UnitedStates relative to balancing the budget.
Resolved by the Senate and House of Representatives
of the United States of America in Congress assembled
(two-thirds of each House concurring therein),
That the fol-
lowing article is proposed as an amendment to the Con-
stitution of the United States, which shall be valid to all
intents and purposes as part of the Constitution when
JEN11494 S.L.C.
ratified by the legislatures of three-fourths of the several

‘‘SECTION 1. Total outlays for any fiscal year shall
not exceed total receipts for that fiscal year, unless two-
thirds of the duly chosen and sworn Members of each
House of Congress shall provide by law for a specific ex-
cess of outlays over receipts by a roll call vote.
‘‘SECTION 2. Total outlays for any fiscal year shall
not exceed 18 percent of the gross domestic product of
the United States for the calendar year ending before the
beginning of such fiscal year, unless two-thirds of the duly
chosen and sworn Members of each House of Congress
shall provide by law for a specific amount in excess of such
18 percent by a roll call vote.
‘‘SECTION 3. Prior to each fiscal year, the President
shall transmit to the Congress a proposed budget for the
United States Government for that fiscal year in which—
‘‘(1) total outlays do not exceed total receipts;
‘‘(2) total outlays do not exceed 18 percent of
the gross domestic product of the United States for
the calendar year ending before the beginning of
such fiscal year.
JEN11494 S.L.C.
‘‘SECTION 4. Any bill that imposes a new tax or in-
creases the statutory rate of any tax or the aggregate
amount of revenue may pass only by a two-thirds majority
of the duly chosen and sworn Members of each House of
Congress by a roll call vote. For the purpose of deter-
mining any increase in revenue under this section, there
shall be excluded any increase resulting from the lowering
of the statutory rate of any tax.
‘‘SECTION 5. The limit on the debt of the United
States shall not be increased, unless three-fifths of the
duly chosen and sworn Members of each House of Con-
gress shall provide for such an increase by a roll call vote.
‘‘SECTION 6. The Congress may waive the provisions
of sections 1, 2, 3, and 5 of this article for any fiscal year
in which a declaration of war against a nation-state is in
effect and in which a majority of the duly chosen and
sworn Members of each House of Congress shall provide
for a specific excess by a roll call vote.
‘‘SECTION 7. The Congress may waive the provisions
of sections 1, 2, 3, and 5 of this article in any fiscal year
in which the United States is engaged in a military conflict
that causes an imminent and serious military threat to
national security and is so declared by three-fifths of the
duly chosen and sworn Members of each House of Con-
gress by a roll call vote. Such suspension must identify
JEN11494 S.L.C.
and be limited to the specific excess of outlays for that
fiscal year made necessary by the identified military con-
‘‘SECTION 8. No court of the United States or of any
State shall order any increase in revenue to enforce this
‘‘SECTION 9. Total receipts shall include all receipts
of the United States Government except those derived
from borrowing. Total outlays shall include all outlays of
the United States Government except those for repayment
of debt principal.
‘‘SECTION 10. The Congress shall have power to en-
force and implement this article by appropriate legislation,
which may rely on estimates of outlays, receipts, and gross
domestic product.
‘‘SECTION 11. This article shall take effect beginning
with the fifth fiscal year beginning after its ratification.’’.

5888  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Energy Politics & Science on: June 06, 2011, 06:14:39 PM
Not admitted in the piece is that one of Germany's ideas for replacing nuclear, is to ... but nuclear power from France.  That shifts all this do-goodery over to simply not-in-my-backyard politics.

BTW, what the hell does abandoning nuclear have to do with helping Europe meet its carbon cap.  Nuclear was the most carbon free of any source mentioned!
5889  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Political Economics: Krugman says we need a stimulus program. Good grief. on: June 06, 2011, 11:27:32 AM

Krugman: We need a new stimulus, a new boot from the Fed.

Woman from Reuters is completely oblivious to damage done by uncertainty now in regards to FUTURE tax rates and interest rates.

Chamber of Commerce economist: 400-500 major projects waiting for regulatory approval could be started tomorrow. The economy is broad and diverse.  This government needs to get out of its way.
5890  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Government programs: The real cost of auto bailouts, WSJ on: June 06, 2011, 11:17:02 AM
(More famous people reading the forum)

The Real Cost of the Auto Bailouts
The government's unnecessary disruption of the bankruptcy laws will do long-term damage to the economy.


President Obama's visit to a Chrysler plant in Toledo, Ohio, on Friday was the culmination of a campaign to portray the auto bailouts as a brilliant success with no unpleasant side effects. "The industry is back on its feet," the president said, "repaying its debt, gaining ground."

If the government hadn't stepped in and dictated the terms of the restructuring, the story goes, General Motors and Chrysler would have collapsed, and at least a million jobs would have been lost. The bailouts averted disaster, and they did so at remarkably little cost.

The problem with this happy story is that neither of its parts is accurate. Commandeering the bankruptcy process was not, as apologists for the bailouts claim, the only hope for GM and Chrysler. And the long-term costs of the bailouts will be enormous.

In late 2008, then-Treasury Secretary Henry Paulson tapped the $700 billion Troubled Asset Relief Fund to lend more than $17 billion to General Motors and Chrysler. With the fate of the car companies still uncertain at the outset of the Obama administration in 2009, Mr. Obama set up an auto task force headed by "car czar" Steve Rattner.

Under the strategy that was chosen, each of the companies was required to file for bankruptcy as a condition of receiving additional funding. Rather than undergo a restructuring under ordinary bankruptcy rules, however, each corporation pretended to "sell" its assets to a new entity that was set up for the purposes of the sale.

With Chrysler, the new entity paid $2 billion, which went to Chrysler's senior lenders, giving them a small portion of the $6.9 billion they were owed. (Fiat was given a large stake in the new entity, although it did not contribute any money). But the "sale" also ensured that Chrysler's unionized retirees would receive a big recovery on their $10 billion claim—a $4.6 billion promissory note and 55% of Chrysler's stock—even though they were lower priority creditors.

If other bidders were given a legitimate opportunity to top the $2 billion of government money on offer, this might have been a legitimate transaction. But they weren't. A bid wouldn't count as "qualified" unless it had the same strings as the government bid—a sizeable payment to union retirees and full payment of trade debt. If a bidder wanted to offer $2.5 billion for Chrysler's Jeep division, he was out of luck. With General Motors, senior creditors didn't get trampled in the same way. But the "sale," which left the government with 61% of GM's stock, was even more of a sham.

If the government wanted to "sell" the companies in bankruptcy, it should have held real auctions and invited anyone to bid. But the government decided that there was no need to let pesky rule-of-law considerations interfere with its plan to help out the unions and other favored creditors. Victims of defective GM and Chrysler cars waiting to be paid damages weren't so fortunate—they'll end up getting nothing or next to nothing.

Nor would both companies simply have collapsed if the government hadn't orchestrated the two transactions. General Motors was a perfectly viable company that could have been restructured under the ordinary reorganization process. The only serious question was GM's ability to obtain financing for its bankruptcy, given the credit market conditions in 2008. But even if financing were not available—and there's a very good chance it would have been—the government could have provided funds without also usurping the bankruptcy process.

Although Chrysler wasn't nearly so healthy, its best divisions—Jeep in particular—would have survived in a normal bankruptcy, either through restructuring or through a sale to a more viable company. This is very similar to what the government bailout did, given that Chrysler is essentially being turned over to Fiat.

The claim that the bailouts were done at little cost is even more dubious. This side of the story rests on the observation that GM's success in selling a significant amount of stock, reducing the government's stake, and Chrysler's repayment of its loans, show that the direct costs to taxpayers may be lower than many originally feared. But this doesn't mean that taxpayers are off the hook. They are still likely to end up with a multibillion dollar bill—nearly $14 billion, according to current White House estimates.

But the $14 billion figure omits the cost of the previously accumulated tax losses GM can apply against future profits, thanks to a special post-bailout government gift. The ordinary rule is that these losses can only be preserved after bankruptcy if the company is restructured—not if it's sold. By waiving this rule, the government saved GM at least $12 billion to $13 billion in future taxes, a large chunk of which (not all, because taxpayers also own GM stock) came straight out of taxpayers' pockets.

The indirect costs may be the worst problem here. The car bailouts have sent the message that, if a politically important industry is in trouble, the government may step in, rearrange the existing creditors' normal priorities, and dictate the result it wants. Lenders will be very hesitant to extend credit under these conditions.

This will make it much harder, and much more costly, for a company in a politically sensitive industry to borrow money when it is in trouble. As a result, the government will face even more pressure to step in with a bailout in the future. In effect, the government is crowding out the ordinary credit markets.

None of this suggests that we should be unhappy with the recent success of General Motors and Chrysler. Their revival is a very encouraging development. But to claim that the car companies would have collapsed if the government hadn't intervened in the way it did, and to suggest that the intervention came at very little cost, is a dangerous misreading of our recent history.

Mr. Skeel, a professor of law at the University of Pennsylvania, is the author of "The New Financial Deal: Understanding the Dodd-Frank Act and its (Unintended) Consequences" (Wiley, 2010).
5891  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Cognitive Dissonance, Glibness and Stupidity on: June 06, 2011, 10:18:03 AM
President Obama is now saying that high energy prices are part of what is holding back our economic growth.  IMAGINE THAT!
Step one on my 'what would you do' discussion is to open up energy production.  A good time to start that would have been in the FY1996 budget reconciliation bill (H.R. 2491, §§5312-5344) would have opened ANWR to energy development, but the measure was vetoed:

A good time to energize a national strategy of increased energy development on all fronts the next decade came from the Cheney task force. Instead they attacked it ad hominem.  Had we implemented that plan then, Obama might have a better shot at reelection now.  I doubt if the incumbent can see that even now.  Hindsight is not always 20/20.
5892  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, budget process on: June 06, 2011, 10:00:02 AM
"I dislike the term "crony capitalism". 

Agree!  Crony capitalism as it is used is the opposite of capitalism, not a version of it.  Like compassionate-conservative (big government conservative).  Why not just honestly say you aren't a conservative.

Not catchy but I like to call it a state run economy or at least moving toward one.  Allowing capital to move freely to its most valuable use is the opposite of these policies in question.

fascism is just as valid in its second definition in Merriam Webster:  a tendency toward or actual exercise of strong autocratic or dictatorial control, but in its first definition it seems too strong, true totalitarianism.  Misguided swing voters went to Pelosi-Reid in '06, Obama in '08; we want them back in '012.  Calling them fascists or former fascists is probably not helpful IMHO.
5893  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The War on Drugs on: June 06, 2011, 09:32:21 AM
Yes, like terrorists.  You can shoot them but not question them for long periods.

Fetal alcohol syndrome and damage from cigarette smoke are other areas of impossibility because they falsely assume there is a human being growing and developing inside the mother. 

'Holy sacrament' is the truth.  It is the one area where we accept putting a religion (atheism) ahead of the discoveries of science and ultrasound photography.  If we admitted that one of God's creatures was in there we could at least weight the merits of affording it reasonable protection from alcohol and drugs.
5894  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, budget process on: June 06, 2011, 09:18:29 AM
"But we are still driving cars!  And will be for some time.  No new product is "killing their market share"."

Cars change somewhat every year. For the most part it seems to me that competitors Honda and Toyota, along with buying no new car at all, is what is killing their market share.  Really it is their own non-competitiveness killing their market share and profit.  Running our economy at less that 80% efficiency also means the difference for large companies of not making the sales at the margin that pushes you into the black. In other words, government wrongheadedness is a big part of what is killing them in first place.

How does someone say with certainty what new life would or would not have flourished if we weren't propping up dinosaurs.  Most likely the GM brand(s) and most GM employees that would have flourished just fine if the company were allowed to go through the normal, time tested process of reorganization.

Do you really favor government picking winners and losers or just in this case, or are you just picking away at the edges of the real issue?  Did you ever get back to me on where they derive that power, to invest in one business and not others?  Do you agree or disagree with John Roberts point that all people have the same rights and they are not tied to being a little guy or middle class?  Do you agree with my math that the US economy has missed out on roughly $1.5 trillion dollars of new innovation and new production since the end of the recession in June 2009 by shunning pro-growth, freedom-based economic policies and choosing instead to move toward a state directed economy?

Why would it be companies on the brink of failure where we want to put our public investment, if it was constitutional?  Why wouldn't we double down instead on successful companies if we want to leverage our growth?  Just curious.

When we are wishy-washy on principles, the choices we face get really complicated.
5895  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The War on Drugs on: June 05, 2011, 10:54:35 PM
""Pot:  Legal, but regulated." Regulated by whom?"

Decriminalization would offer more freedom than a complete, legal government takeover.
"Recent evidence suggests that perinatal (marijuana) exposure alters fundamental developmental processes,"

GM, There isn't a human being developing inside a pregnant woman.   This is settled law.  Saying otherwise is 'crazy talk'. 

If there was, and we systematically killed 40 million of them, it would be like a ... modern day holocaust.  And we know it isn't.
5896  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Tea Party, Glen Beck and related matters on: June 05, 2011, 03:59:56 PM
This was a very long, very slow exit for someone who according to early liberal reporting was tossed out on his ass.  Somehow I will guess that his affiliation with Fox will continue.  Also I expect his 3 hour per day, 15 hours per week radio show will continue, the third highest rated show in the nation.  (Plus an internet site.)  So worst case he will fade from sight about like Rush Limbaugh did when he left television in the mid-1990s, and is still considered the right's most influential person.
5897  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors on: June 05, 2011, 03:44:03 PM
"Problems exit between Taiwan and China, Japan and China, South Korea and North Korea, etc. but we try negotiation with China and North Korea and while we promise to defend our allies, we keep in mind what is good for America first.  It should be the same with Israel.  No more no less.  As an American, I do not feel a greater obligation to Israel than I do to Taiwan or South Korea or any other good ally."

The threats each of those face is different.  In each or in all of them it would be better to help in a small way now than to fight a regional or world war on their behalf later.  Managing different threats requires different strategies.  In all cases the underlying theme is peace through strength, not through giveaways.  What part of Taiwan do we propose to give back?
5898  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, budget process on: June 05, 2011, 03:15:47 PM
Someone declares bankruptcy.  He has a home with a mortgage by a bank in which is in in default.  Do his other creditors get to take a piece of what the home sells for?
Can only guess.  If there is cash back, then yes.  Assuming he is underwater on the mortgage, no; I can't see how unsecured creditors or creditors with other collateral could get ahead of the secured liens already in place on the house.  

If the homeowner gets to keep the house, then the judge would have to allow funds to be used for that redemption, or write down the amount owed with Stalinist leeway.  Court proceedings no doubt could be used to delay the foreclosure - at least that is how it worked with a cancellation of a Contract for Deed.

If Obama intervenes, all bets are off. 
5899  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, budget process on: June 05, 2011, 01:38:29 PM
"the tenant might be left on the street and homeless"

Homeless, lol, there's a term that has lost all meaning in Scandinavian-based Minnesota.  No. They just move on and do it again.  Eviction means front of the line for emergency assistance - your money.  The question is how soon it happens and what is learned from the experience.  What is learned is that payment deadlines come and go without consequence and that the free money not used on rent can be spent on everything else, guns, drugs, booze, cigarettes, whatever one is into.  The larger point is that the investor quits investing when the system prevents you from enforcing the agreed terms of a contract.  How do you measure the economic damage done by investments that are never made?

"Bankruptcy Judges have wide leeway..."??  Not THAT wide!

IIRC, Obama brokered a deal with taxpayer money that kept the company out of the judge's reach, and reordering winners and losers based on political favors and something that resembles your idea of helping the little guy.  What could be smaller than a 200,000 person union that wins healthcare rights for hundreds of thousands of people who don't even work there.  By criminal, I meant that in the general sense of illegal trespassing on private property, and executive branch treason - undermining our economic system and our country from within.  Show me persuasively where they derived lawful power to do that and I will be happy to retract and correct.
Creative destruction, yes.  If you don't continuously innovate, someone else will and eat your lunch.  But when you lose your market share, lose your business, lose your risk capital, you still get to pull yourself back up and try something else - with valuable lessons learned.
Answering my own question, how do you measure the economic damage done by investments that are never made?

If economic growth of a 14 trillion dollar economy is 2% and should be 7% coming out of a hole like this, the damage is $700 billion of production per year compounding continuously.
5900  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, budget process on: June 05, 2011, 12:33:37 AM
JDN: "I understand and basically agree with everything Doug said"  - Should have stopped there.  grin

"secured creditors by definition have no heart"

That is not fair.  Maybe they will foreclose what's left of this loser of an investment and donate all that capital to a charity or research that will save a family member's life. How do we know that enforcing their rights under a contract is heartless?  It wasn't the secured creditor who didn't meet their obligations under the contract.  Maybe it was the greedy, short-sighted, self-centered union benefit negotiators who really were the heartless ones, shorting out the oven where the pies are baked.

Every time a tenant thanks me for my kindness and patience (aka stupidity) for allowing them to fall behind on rent, and further behind, it comes back to bite both of us.  Too much debt burden to handle the ups and downs of your business is too much debt burden.  You don't have to fall on a sword and they don't take your first born in bankruptcy.  You get to walk away and start over.  WIth all the unemployment compensation and social programs to confuse people, they end up walking and not starting over.

If secured debt isn't secure, who gets hurt next?  The elephant in the room is all the other new financing and new plants in every other industry that aren't being built and this kind of unpredictability, uncertainty, and uneven application of the law is part of the reason IMO.

Putting the unions ahead of secured creditors was criminal.

Places where laws are applied unevenly depending on who you know and how much political clout you have are called third world countries.  We're getting there.

"average people are important....take care of the middle class."

No. Every obligation in a contract and every party to a contract is important.  Chief Justice John Roberts put it this way answering Dick Durbin in his Supreme Court confirmation hearings: 

"Somebody asked me, you know, 'Are you going to be on the side of the little guy?' And you obviously want to give an immediate answer. But as you reflect on it, if the Constitution says that the little guy should win, the little guy is going to win in court before me. But if the Constitution says that the big guy should win, well, then the big guy is going to win, because my obligation is to the Constitution."

In contract law, it is what's in the contract that counts - if it is a legal, valid, binding contract.  What right did the executive branch of the federal government have to intervene and pick winners and losers?  What article in the constitution authorizes that power?

If you are a highly paid professional in Seattle working for Microsoft or Boeing and you are one paycheck away from starving to death, I would recommend taking night classes at the local technical college in a different field  before the next downturn.  It's a cold, cruel world out there and runaway capitalism is the worst system on earth, except for all the alternatives.

Someone should also point out that in Flint and Detroit Michigan, people voted for the policies that put their industries under.  Cry me a river.  How about accepting the consequences of our actions??

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