Freedom Line Blog

The Los Angeles Times reports that California’s unemployment is now 12.1 percent statewide, 25 percent higher than the national average, and second only to Nevada’s 13.4 percent.

For decades, California politicians have prided themselves on being “first in the nation” on numerous job-killing efforts such as fanciful global warming regulations, onerous land use regulations, and stupefying bans on products like Mylar balloons and plastic bags at grocery stores.

Recently, Troy wrote a painfully insightful piece on yet another attempt to wage war on business by Los Angeles Mayor Antonio Villaraigosa (higher taxes on commercial property).

California’s political class cannot resist the siren song of being the first to put the screws to the engines of economic growth.  If Villaraigosa’s plan becomes reality, perhaps the Golden State will finally be first in a category no one should want: unemployment.

Larry Summers, the economist whose resume includes helping create the kind of mortgage default swaps that crashed the financial system, being fired as President of Harvard for sexist remarks about female scientists, and resigning in disgrace as his infrastructure-heavy stimulus package failed, is back with a plan only a Soviet central planner could love.

Writing for Newsweek (itself an entity that’s seen better days), Summers tells his former boss, “Mr. President, We Need a 10 Year Plan.” Give Summers credit for brashness; in Soviet Russia the Communist Party considered it a success if it could make good on any of its 5 year plans.  (It never did.)

I’ll use Summers’ piece as an excuse to do something otherwise thought impossible: praise President Barack Obama for firing at least one bad economist.

It’s not about central planning, Larry; it’s about incentives.  Reform the tax code and streamline regulations with incentives for hiring and producing, and the economy will grow.

Byron York breaks down a CNN poll showing that Republican voters 65 and older (i.e. eligible to receive Social Security) favor Texas Governor Rick Perry for president more than any other GOP candidate.

This flies in the face of the current criticism of Perry’s widely discussed comment at last week’s debate that Social Security is a “Ponzi scheme.”  As far as I can tell, no one has yet shown that Perry is incorrect since in both Social Security and a Ponzi scheme the money from later investors (or taxpayers) goes to benefit earlier investors (or taxpayers).

If anything, Perry should be applauded for speaking the kind of tax-and-spend truths necessary to get a handle on the nation’s fiscal problems so we can begin to fix them.

Admittedly, there is one noticeable difference between the programs that Cato’s Michael Tanner explains perfectly:

Of course, Social Security and Ponzi schemes are not perfectly analogous. Ponzi, after all, had to rely on what people were willing to voluntarily invest with him. Once he couldn’t convince enough new investors to join his scheme, it collapsed. Social Security, on the other hand, can rely on the power of the government to tax. As the shrinking number of workers paying into the system makes it harder to continue to sustain benefits, the government can just force young people to pay even more into the system.

In fact, Social Security taxes have been raised some 40 times since the program began. The initial Social Security tax was 2 percent (split between the employer and employee), capped at $3,000 of earnings. That made for a maximum tax of $60. Today, the tax is 12.4 percent, capped at $106,800, for a maximum tax of $13,234. Even adjusting for inflation, that represents more than an 800 percent increase.

In addition, at least until the final collapse of his scheme, Ponzi was more or less obligated to pay his early investors what he promised them. With Social Security, on the other hand, Congress is always able to change or cut those benefits in order to keep the scheme going.

The web of possible criminality in the ATF “gun-walking” case i still stretching with a Fox News story confirming the existence a second and third ATF gun at the murder scene of Border Patrol Agent Brian Terry.

Congressional investigators have been looking for evidence of the third weapon for months.  Now, it looks like it disappeared at the behest of the FBI for fear that an informant working for it and ATF would be exposed.

This revelation follows on the news that ATF and the FBI coordinated efforts on other dubious programs that allowed guns to reach known criminals.

There seems to be no end to the incompetent corruption at Eric Holder’s Justice Department.  Can the same indefinite tenure be true of the Attorney General?

New York Times columnist Anand Giridharadas did today what precious few liberal commentators would: give Sarah Palin a fair hearing.  “Confessing” a knee-jerk reaction to Palin that writes-off the former Alaska governor before she speaks, Giridharadas nonetheless noted Palin’s striking analysis of the current political scene from a recent speech in Iowa:

She made three interlocking points. First, that the United States is now governed by a “permanent political class,” drawn from both parties, that is increasingly cut off from the concerns of regular people. Second, that these Republicans and Democrats have allied with big business to mutual advantage to create what she called “corporate crony capitalism.” Third, that the real political divide in the United States may no longer be between friends and foes of Big Government, but between friends and foes of vast, remote, unaccountable institutions (both public and private).

This is the kind of anti-establishment populism that Palin articulated to victory against incumbent Republicans in Alaska (first, fellow members of the state’s Oil & Gas Conservation Commission, then the sitting governor).  Indeed, one of the main reasons John “Maverick” McCain chose Palin as his vice presidential running mate was because of her willingness to buck the system in favor of her principles.

As just what might those principles be as president?  Giridharadas says:

Ms. Palin may be hinting at a new political alignment that would pit a vigorous localism against a kind of national-global institutionalism.

On one side would be those Americans who believe in the power of vast, well-developed institutions like Goldman Sachs, the Teamsters Union, General Electric, Google and the U.S. Department of Education to make the world better. On the other side would be people who believe that power, whether public or private, becomes corrupt and unresponsive the more remote and more anonymous it becomes; they would press to live in self-contained, self-governing enclaves that bear the burden of their own prosperity.

No one knows yet whether Ms. Palin will actually run for president. But she did just get more interesting.

Our friends at Americans for Tax Reform compiled this helpful list of the 21 new or higher taxes President Barack Obama has signed into law since being sworn into office.  Of these, 20 come from ObamaCare.

Remember, try to laugh while you cry.

There’s been quite a bit of media buzz surrounding the recently announced bankruptcy of Solyndra, the California solar panel company that couldn’t turn a profit even after a $535 million loan from the federal government.

But what started out as Exhibit A in the case against subsidizing green jobs into existence has morphed into the latest scandal engulfing the Obama Administration.  At issue is a suspicious connection between a Solyndra investor’s work as a bundler for the Obama campaign and the sweetheart loan given to the company.

On Wednesday, the FBI raided Solyndra’s Fremont, California headquarters, and Republicans are promising increased scrutiny.  It would be bad enough if there is a pay-to-play scandal, but it’s even worse financially since the failure of Solyndra is both corrupt and incompetent.

I’ve taken my share of shots at GOP presidential nominee Mitt Romney for all the usual conservative misgivings about his candidacy.  And while this post is in no way an endorsement of him or his campaign, I do think it worth sharing a link from the Boston Globe to Romney’s newly unveiled economic plan.

Thankfully, it’s all about how to achieve economic growth.  Quin mentioned previously that Rick Santorum, one of Romney’s rivals for the nomination, also has some good ideas.  As conservatives get down to the business of eyeballing the candidates, we’d better get as informed as we can be.  Republican or Democrat, we can’t make another presidential level mistake.

David Codrea, the blogger who originally broke the “Gunrunner” scandal at ATF, reports that another guns-to-criminals scheme is sprouting up in Indiana.

There, a gun seller defended himself recently against an FBI demand for information about guns sold to American crime gangs with all-too-familiar response: I was just following ATF’s guidelines.

That’s right, according to Codrea’s extensive documentation there is now another instance of ATF deliberately violating gun control laws to let weapons fall into criminal hands in the hopes of catching bigger criminal fish.  And how’s this for oversight: when the FBI was told the Indiana gun dealer was working with ATF, the FBI promised to remove the seller from any further investigation.

Add the American Midwest to the list of ATF scandals including Phoenix, AZ, (Project Gunrunner, Operation Fast & Furious) and Tampa, FL (Operation Castaway).

Last week the Acting ATF director was reassigned and the Arizona U.S. Attorney abruptly resigned.  With a third front opening up, how much longer can U.S. Attorney General Eric Holder – the man charged with oversight of ATF – keep his job?

H/T: Michelle Malkin

With its tough anti-illegal immigration law headed to the Supreme Court, the State of Arizona is opening up another legal front in its 10^th Amendment tussle with Eric Holder’s Justice Department.  NBC News reports that the issue this time is the Voting Rights Act:

Arizona is challenging the law’s requirement that the state seek Justice Department approval for any changes in how elections are conducted. Many states are subject to the law’s pre-clearance requirement, generally to remedy past restrictions that discouraged minority voting.

“Arizona is still penalized for archaic violations that were corrected with the implementation of bilingual ballots prior to the 1974 elections,” said the state’s Attorney General Tom Horne. He noted that in 1974, Arizona became the second state to elect a Hispanic governor.

In his response, Attorney General Holder showed how tone deaf he is to any claim of federal overreach:

Vowing to fight the challenge, Holder said the provisions challenged in this case, including the pre-clearance requirement, “were reauthorized by Congress in 2006 with overwhelming and bipartisan support. The Justice Department will continue to enforce the Voting Rights Act, including each of the provisions challenged today,” he said.

So, a law is constitutional because Congress reauthorized it with “overwhelming and bipartisan support”?  There isn’t a justice on the Supreme Court who has let that kind of vapid thinking dissuade him or her from overturning a law.

If that’s the best defense Holder can muster, Arizona may have found the perfect foil to (unwittingly) help it downsize the federal government.

Remember when in June 2009 President Barack Obama promised that under his health care reform bill, “If you like your doctor, you will be able to keep your doctor, period.  If you like your health care plan, you’ll be able to keep your health care plan, period.  No one will take it away, no matter what”?

Byron York makes this contradictory observation:

On the one hand, the new law orders the establishment of health care “exchanges” through which anyone can purchase government-subsidized coverage. On the other hand, the law levies fines on employers who fail to offer coverage to their employees — but sets the fine far below the cost of coverage. In 2010, the average employer paid $4,150 to cover a single employee and $9,773 for family coverage. (Both figures are about double what they were in 2000.) The new law sets fines for employers who don’t cover their workers at $2,000.

So when it takes effect in 2014, the law will give employers a choice: Continue to offer increasingly expensive health coverage, or pay a relatively small fine, save a lot of money, and let employees buy their own subsidized coverage on the exchange. The incentive seems pretty clear.

So too does the bold-faced lie Obama told (yet again) in the health care reform debate.  Whichever GOP candidate gets nominated for president should make this issue one of the main talking points of the general election.

Whatever shred of credibility Fareed Zakaria retained as a conservative pundit from his celebrated book The Future of Freedom has now been officially lost thanks to follow-ups like The Post-American World and today’s essay “Does America Need a Prime Minister?”

In the essay, Zakaria uses the recent S&P downgrade of American sovereign debt to note that “no country with a presidential system has a triple-A rating from all three major ratings agencies.”  He then uses this to support his thesis that the United States would be better served by chucking separation-of-powers and moving to a British-style parliamentary system where the executive and legislative branches are the same.  After all, Britain still has a triune triple-A rating!

How wonderfully anti-American of the Harvard PhD.  Throughout the essay one realizes that Zakaria has wandered so far from the insights of the Founding generation that he now endorses the very system – and possibility for tyranny – that the American Revolution fought to end.  So too did another PhD-turned-constitutional-scold: Woodrow Wilson, the godfather of America’s progressive movement.

Wilson believed that government needed to be professionalized and removed from popular control so that it could act quickly and decisively to cure whatever ailed the populace.  He favored the parliamentary system because it gave enormous power to one man: the Prime Minister.

To appreciate how far Zakaria has wandered from core American principles about the proper way to construct a government, consider this passage from today’s essay:

In the American presidential system, in contrast, you have the presidency and the legislature, both of which claim to speak for the people. As a result, you always have a contest over basic legitimacy. Who is actually speaking for and representing the people?

In America today, we take this struggle to an extreme. We have one party in one house of the legislature claiming to speak for the people because theirs was the most recent electoral victory.  And you have the president who claims a broader mandate as the only person elected by all the people.  These irresolvable claims invite struggle.

There are, of course, advantages to the American system – the checks and balances have been very useful on occasion. But we’re living in a world where you need governments that are able to respond decisively and quickly.  In a fast-moving world, paralysis is dangerous. Other countries are catching up – if not overtaking – America.

Who are these other countries?  Members of the European Union with a currency and debt crisis several times worse than our own?  China with its unsustainable population demographics and monetary policy?  Arab dictatorships that are being toppled by the month?  Latin American oligarchies that nationalize industries to buy off the masses with the wealth of entrepreneurs?

The problem we are experiencing in Washington, D.C. is not America’s constitutional design of checks-and-balances and separation-of-powers.  If anything, the ability of the House GOP to slow down the liberal agenda to tax-and-spend the nation into bankruptcy is due solely to the very “paralysis” intended by our constitutional framework.

If Zakaria wants to end the paralysis in D.C., he should vote for pro-growth fiscal conservatives in 2012 and urge all of his readers to do the same.

In a brilliantly written refutation of the Obama-as-Genius argument, Mortimer Zuckerman explains why even taking all the money from “rich” people and corporations won’t solve the deficit problem:

Even if the government instituted a 100% tax on both corporate profits and personal incomes above $250,000 per year, it would yield enough revenue to run the government for only six months. Why? Because under Mr. Obama’s presidency, government spending has swelled to 24% of GDP from 18%.

Spending is Obama’s original sin as president.  Unless he’s willing to repent of that folly and ratchet back on the flow of money, the American economy will stay mired in a recession.

Recently, I wrote about the Social Security Trust Fund being a piggy bank for other federal spending programs.  In return, federal spenders put worthless IOUs back in piggy with an implied promise to pay back the debt with higher taxes in future years.

Now, there is word that Social Security Disability Insurance – yet another expense drawn from the empty retirement Trust Fund – will go bankrupt by 2017.  The reason for the rapid insolvency of disability insurance is simple: eligibility for disability can begin before reaching retirement age.  Per the Associated Press:

Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can’t find new ones in an economy that has shed nearly 7 million jobs.

The more President Obama’s Washington dithers on enacting policies to spur economic growth, the more unemployed people will be forced to find money wherever they can.  The vast majority of Americans want to work, but Obama’s job-killing policies just aren’t giving them the chance.

It would be an unnecessary irony if a liberal like Obama presided over an austerity government that not only raised taxes, but also cut services like Social Security that liberals love.  Yet that is the path we’re on as a recessed economy lurches from market plunges to debt downgrades to a contracting job market.

We need an “opportunity president,” and this one surely isn’t it.

Howard Portnoy at Hot Air offers to help redirect the frustration Rep. Maxine Waters (D-CA) vented recently against the Tea Party to a more appropriate target:

The situation creates a catch-22 for Waters and other black politicians. They can continue to rail out helplessly at forces they have no control over. Or they can accept the bitter reality that the messiah they thought they were electing is either mythical or yet to come. Is it possible that the calls to primary Obama will come from, of all places, the black community? It would certainly represent a healthy first step toward a post-racial America.

From a must-read profile in the New Yorker on Supreme Court Justice Clarence Thomas:

The implications of Thomas’s leadership for the Court, and for the country, are profound. Thomas is probably the most conservative Justice to serve on the Court since the nineteen-thirties. More than virtually any of his colleagues, he has a fully wrought judicial philosophy that, if realized, would transform much of American government and society. Thomas’s views both reflect and inspire the Tea Party movement, which his wife has helped lead almost since its inception. The Tea Party is a diffuse operation, and it can be difficult to pin down its stand on any given issue. Still, the Tea Party is unusual among American political movements in its commitment to a specific view of the Constitution—one that accords, with great precision, with Thomas’s own approach. For decades, various branches of the conservative movement have called for a reduction in the size of the federal government, but for the Tea Party, and for Thomas, small government is a constitutional command.

Later on, the profiler notes that Thomas – along with other conservatives on the Supreme Court – is poised to overturn the clearest expression of government overreach in a generation: ObamaCare.  If that happens, Thomas’ judicial philosophy, and the Tea Party’s importance, will be vindicated.

The liberal obituaries for the mostly-dead Huntsman for President campaign get an interesting addition from Michael Tomasky at the Daily Beast:

The Huntsman strategy here is obvious: position himself as the moderate and reasonable guy on the off chance Republicans decide to be moderate and reasonable. We must assume he is aware that his odds on this are rather long, so what he’s really hoping for is to be the consensus candidate of 2016. Maybe the party just has to go through this purge, this Reign of Terror; so just let it do that, and once it does and nominates an extremist who can’t beat a weak incumbent during a time of 9 percent unemployment rates, and the heads are piled high enough in the tumbrels and enough people finally have returned to their senses, he will ride the Thermidorian wave to victory after Obama leaves town.

So, the Tea Party in particular and the conservative movement in general is creating a “Reign of Terror” that is depriving liberals of the most progressive member of the GOP presidential pack from facing Obama next year?

There’s a frightful reality fast-approaching, but it isn’t a 2012 match-up seeing who’s less conservative.  It’s the fiscal and cultural time-bomb that is ticking ever closer to exploding if Barack Obama or Jon Huntsman’s views are put into practice.

H/T: Political Wire

After a barrage of base-hating tweets, even the liberal website Talking Points Memo thinks former Utah Governor and Obama China Ambassador Jon Huntsman’s GOP presidential campaign is headed for failure.

TPM’s headline says it all: “Is He Even Trying?  Huntsman Seems Determined to Alienate the GOP Base

CFIF and others have been all over Huntsman’s record, noting how deliberately incompatible it is with almost any slice of the Republican electorate, let alone conservatives.

If voters want a former governor with corporate ties and moderate-to-liberal positions, they’ll vote for Mitt Romney.  If they want someone else, it won’t be Huntsman.

Though Senator Scott Brown (R-MA) hasn’t exactly been the reincarnation of John Adams, some Bay State Tea Party leaders are weighing whether helping reelect the moderate Brown is better than sitting back and letting him duke it out with Harvard professor and Obama protégé Elizabeth Warren next year:

“Elizabeth Warren is a game-changer,” Varley said. “Elizabeth Warren is a dyed-in-the-wool progressive. We can say we may not be thrilled with Sen. Brown, but we certainly don’t want Elizabeth Warren.”

Unlike other GOP moderates like Senators Olympia Snowe (ME), Orrin Hatch (UT), and Richard Lugar (IN), Brown will likely get a pass in the primary, and have uber-liberal Warren to show as a much worse alternative.  Between now and November 2012, hopefully Brown gives Tea Party voters something to vote for.

H/T: FoxNews

In case you missed it, Stephen Moore of the Wall Street Journal explains “Why Americans Hate Economics” with two wonderfully clear paragraphs.

The first explains where economics as a discipline went wrong:

How did modern economics fly off the rails? The answer is that the “invisible hand” of the free enterprise system, first explained in 1776 by Adam Smith, got tossed aside for the new “macroeconomics,” a witchcraft that began to flourish in the 1930s during the rise of Keynes. Macroeconomics simply took basic laws of economics we know to be true for the firm or family—i.e., that demand curves are downward sloping; that when you tax something, you get less of it; that debts have to be repaid—and turned them on their head as national policy.

The second shows where Keynesians err:

The grand pursuit of economics is to overcome scarcity and increase the production of goods and services. Keynesians believe that the economic problem is abundance: too much production and goods on the shelf and too few consumers. Consumers lined up for blocks to buy things in empty stores in communist Russia, but that never sparked production. In macroeconomics today, there is a fatal disregard for the heroes of the economy: the entrepreneur, the risk-taker, the one who innovates and creates the things we want to buy. “All economic problems are about removing impediments to supply, not demand,” Arthur Laffer reminds us.

Knowledge becomes inaccessible only when an influential group decides that reality doesn’t fit their ideal.  The Keynesians have had their day.  It’s time for the proponents of sound money and economic growth to have their turn.