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Archive for October, 2010
October 8th, 2010 at 11:20 pm
Video: Obama’s House Cleaning Requires Less Hope, More Change
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In this week’s Freedom Minute, CFIF’s Renee Giachino calls the recent departure of several senior White House staff “a good start,” then recommends further cuts in the president’s cabinet.

 

October 8th, 2010 at 4:58 pm
Restoring the Partnership Model to Wall Street Risk Taking

For all the ink spilled trying to divine the cause of the present financial crisis the most stirring theory is that culture – not capitalism – failed America.  It’s a theory that lies at the heart of the Citizens United documentary “Generation Zero” and is discussed in eye-popping detail by William Cohan in today’s New York Times.

Asserting the commonsensical notion that people do what they are rewarded to do, Cohan (a former denizen of Wall Street) claims that when firms morphed from partnerships to corporations they simultaneously shifted the risk of loss from executives to stockholders.  That simple change in legal form privatized profits while socializing losses.

Here’s Cohan’s solution:

To my mind, its central feature should be that each of the top 100 executives at Wall Street’s remaining “systemically important” firms be personally liable for the risks they take. Not just their unexercised stock options or restricted stock, but every asset they have in their possession: from their cars to their fancy homes to their bulging bank accounts.

Pretty harsh, right? Maybe, but Wall Street deserves no sympathy. Had this security, or something like it, been in place at every Wall Street firm five years ago, there would have been no mortgage bubble, no financial crisis, no deep and unsettling economic recession with nearly 10 percent unemployment, no need for the Troubled Asset Relief Program, and no need for Dodd-Frank or Basel III.

Why? Because human beings do what they are rewarded to do — especially on Wall Street — and if they are rewarded for taking prudent and sensible risks, that’s exactly what they will do.

October 8th, 2010 at 4:23 pm
Democratic Rep. Alan Grayson’s Days Numbered?

Along with Reps. John Dingell (D-MI) and Barney Frank (D-MA), another incumbent Democrat congressman is looking at the very real possibility of losing his seat on November 2nd.  And because of his stunts, it couldn’t happen to a better poster child for partisan politics than Florida’s Alan Grayson.  Byron York provides a nice summary of Grayson’s offenses:

Grayson has been involved in so many dust-ups, scrapes and other indignities that it’s surprising to realize he has only been in office 20 months. From describing the Republican health plan as hoping the sick will “die quickly” to calling a top official at the Federal Reserve a “K Street whore” to saying of former Vice President Dick Cheney that “blood … drips from his teeth while he’s talking” to “Taliban Dan” — well, a lot of people in Florida and Washington won’t be sad to see him go.

A poll taken by Sunshine State News at the time of the ad controversy showed Webster with a 7-point lead, 43 percent to 36 percent. Barring any unforeseen events, that’s likely to hold. The 8th District was Republican for almost 30 years, until the Obama-Grayson victories of 2008. Now it appears to be moving back to the GOP.

October 8th, 2010 at 11:01 am
Obama’s “Stimulus” 19 Months Later: September Unemployment 9.6%, 95,000 Jobs Lost
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Nobody should cheer bad economic news, but neither should anyone deny reality or ignore the clear consequences of toxic public policy.

Some 19 months after Barack Obama signed a nearly $1 trillion “stimulus” bill into law, the Labor Department this morning announced that unemployment remains elevated at 9.6%, and the nation lost 95,000 jobs in September.  This following Obama’s and Joe Biden’s promises of a “recovery summer.” Obama and his apologists may trot out the teleprompters and once again claim that the private sector gain of 64,000 jobs (offset by losses in other sectors to arrive at the negative 95,000 total) shows that “we’re moving in the right direction.”

No, we’re not.  Even that paltry 64,000 is down almost 30,000 from the August private sector gain of 93,000, all at a time when his “stimulus” would supposedly have the economy accelerating, not decelerating.  Further, the Labor Department announcement stated that 15,000 more jobs were lost in July and August than previously estimated, along with a 366,000 downward revision in jobs during the 12 months through March.  The bottom line:  since Obama signed the “stimulus,” unemployment has steadily risen from 8.2% to 9.6%.

By way of comparison, in the 19 months following the arrival of Ronald Reagan’s tax cuts in January 1983, unemployment plummeted from 10.4% to 7.3%.  The facts speak for themselves.

October 8th, 2010 at 9:33 am
Podcast: Results from the 13th Annual Wacky Warning Labels Contest
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In a recent interview with CFIF, Contest founder and bestselling book author Bob Dorigo Jones shares the results of the 13th Annual Wacky Warning Labels Contest and discusses America’s lawsuit-happy culture and the lengths to which companies must go to avoid being sued.

Listen to the interview here.

October 7th, 2010 at 10:00 pm
Peter Beinart Just Making it Up as He Goes Along
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Pity Peter Beinart. The former New Republic editor was once a voice of intellectual independence on the left — even going so far as to write a 2006 book arguing that it was incumbent upon liberals to aggressively prosecute the War on Terror.

A prophet is despised in his own country, however, and in the world of Washington punditry it’s more common for the prophet to change than the country. Thus, Beinart — after years of being labeled a Zionist warmonger by his colleagues on the left — has turned tail and run into the arms of his left-wing brethren. The source of his rebirth? A scathing rebuke to what he calls “the American Jewish Establishment” in the New York Review of Books and a decided retreat from his previous muscularity on foreign policy.

Having claimed sanctuary with the left, Beinart is now drifting into the realm of liberal self-parody. As his party stands on the precipice of what could be one of the largest midterm election refutations in history, he takes to the virtual pages of the Daily Beast today to confidently proclaim that Barack Obama is “a lock” for reelection in 2012. The only problem is that the self-styled intellectual’s data has been tortured until it confesses his preferred outcome. Consider:

Of course Barack Obama is likely to be reelected. For starters, American presidents usually get reelected. In the last 75 years, incumbents have lost a grand total of three times: in 1976, 1980, and 1992. And what did Gerald Ford, Jimmy Carter, and George H.W. Bush all have in common? They had serious primary challenges within their own party (from Ronald Reagan, Ted Kennedy, and Pat Buchanan, respectively). The last president who lost reelection without a major primary challenge was Herbert Hoover in 1932.

Beinart’s historical invocation is deeply flawed. He seems to have chosen a period of 75 years only because it yields the most favorable outcome for his thesis. But should the 1936 election really be taken with equal weight as 1992 in understanding modern American politics? Look at it this way: the same data could be used to say that three of the last six presidents have failed to be elected to a second term — that 50 % failure rate provides no room for the confidence that Beinart is peddling.

As for primary challenges, this a more subtle, but still flawed, analysis. In all likelihood, Beinart has the causation wrong. Presidents don’t lose because they have primary challenges. They have primary challenges because of the weakness that ends up leading to their loss. Reagan, Clinton, and Bush 43 simply did a better job of managing their coalitions than Ford, Carter, or Bush 41. But had the latter three not been challenged for their party’s nomination, it’s still not safe to say they would have been on sure footing for reelection.

Were Beinart not imbibing Organizing for America soma, he could have produced a more thoughtful piece. The landscape for Obama in 2012 probably looks closer to that facing George W. Bush in 2004 than any of the earlier models he cites. Like Bush, Obama’s tenure has led to some (still relatively stifled) disquiet in his own party and has polarized public opinion at large — making a majority in the electoral college very tough sledding. But like Bush, he also has the benefits of incumbency and a known brand of leadership to take into an election where the opposition’s bullpen is  thus far a mile wide and an inch deep.

This is no time for triumphalism on the left. Obama certainly retains the prospects of being reelected in 2012. But if he does, it will be a street fight, not a coronation.

October 6th, 2010 at 5:36 pm
Ramirez Cartoon: Dems in Tea Party Hot Water
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

October 6th, 2010 at 1:29 pm
Tea Party-Republican Fusion Favors Grassroots

The fusion of the Tea Party and Republican Party is underway, according to an article in today’s Wall Street Journal.  Of particular interest is the headway being made in Virginia where Tea Party activists are keeping Republican politicians’ feet to the fire.

Virginia’s statewide tea-party alliance is perhaps the most advanced of any in the country, both in organization and in its own interactions with the GOP.

Its convention this weekend is expected to draw the cream of the state Republican Party and at least 3,000 participants. The state’s top three Republicans—Gov. Bob McDonnell, Lt. Gov. Bill Bolling and Attorney Gen. Ken Cuccinelli—all agreed to attend and field questions, but as mere panelists, not keynote speakers.

“The party is trying to mollify the tea-party folks, if only as a protective measure,” says Mr. Cuccinelli, who rose to office last year with the support of thousands of tea-party activists.

Messrs. McDonnell and Bolling see it differently. “I am going because I am driven, and the tea-party members are driven, by the same ideas,” says Mr. McDonnell. Mr. Bolling says his message to the convention will be “that we stand with them and we appreciate their involvement in the political process.”

Several events have helped to push Virginia to the vanguard of a national tea-party movement. A huge sales-tax increase in 2004, passed with the help of Republican votes, stirred a rebellion among the party’s base and helped propel a new crop of conservatives to power last November, including Messrs. McDonnell, Bolling and Cuccinelli.

Accountability is coming to the political process.  Double-dealing politicos beware.

October 6th, 2010 at 12:45 pm
The ‘Congressional Effect’ Strikes Again

Earlier, CFIF profiled Eric Singer of Congressional Effect Management as the foremost proponent of avoiding political risk by investing in the stock market only when Congress it out of session.  In his own commentary, Singer blasts Speaker Nancy Pelosi’s (D-CA) do-nothing-right caucus for failing to address the budget crisis they created:

As the nation watches in horror as its debt begins to grow beyond the point of no return, the Congressional Budget Office continues statically scoring all legislation.

It assumes that if tax rates are raised, taxes received by the Treasury will go up proportionately. It disregards the impact of the extra 10 billion hours it now takes to figure out our taxes.

It ignores the fact that in the face of 1,400 new regulations from health care and financial overhauls (Sarbanes-Oxley had only 16), virtually all businesses will slow down and hoard cash as they try to understand what the new rules might be.

Static scoring assumes that the uncertainty created by the presence of new laws and new regulations does not affect behavior or taxes collected. Static scoring assumes some sucker will always be available to buy our debt no matter how much we waste. Worst of all, it assumes no one will change behavior to reduce taxes.

Every assumption of the static scoring model is demonstrably false. Higher tax rates usually result in lower revenues as people change their actions to reduce their tax burden. This will certainly happen if some or all of the Bush tax cuts expire and the economy continues to sag as a result. The time, cost and restraints of new regulations can choke businesses.

The kind of rampant uncertainty caused by the explosion in federal regulations will continue to slow America’s economic recovery.  Riffing on Singer, maybe after passing CFIF’s ‘One More Vote’ initiative, the country can pass a constitutional amendment to limit the amount of congressional work days.

H/T: Investor’s Business Daily

October 5th, 2010 at 9:52 pm
Even the Presidential Seal is Running Away from Obama
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Not a good sign … but a nice moment of levity with the President:

October 5th, 2010 at 12:45 pm
Voter Anger Up, Campaign Contributions Down

In a revealing analysis the researchers at Rasmussen Reports found that although voter anger at the political class is at record highs, campaign contributions from individuals are drying up.  Why would people fed up with the political system not be pouring money into contested races?  Probably because the memory of Republican free-spending is still so fresh in the public’s mind.

The Rasmussen telephone survey found that while most of the respondents thought campaign contributions are important to winning, they think a candidate’s political positions is the ultimate deciding factor.

So there you have it.  For candidates running this year it sounds like voters are expecting ideological purity to trump fundraising prowess.  Hopefully, they’re right.

October 5th, 2010 at 12:15 pm
10th Amendment Fans Using Numerology to Promote Nullification Stance

First, a disclosure: I am very partial to interesting (and inconsequential) number combinations, such as 12:34 on a digital clock.  Silly?  Yes.  Unusual?  Well…

The Tenth Amendment Center (TAC) launched a multi-city tour called “Nullify Now!” that encourages state governments to ignore federal laws they deem unconstitutional.  The second stop on the tour occurs on October 10, 2010, or as TAC enthusiasts prefer, 10-10-10.

Here’s a blurb about the headliners participating in the tour:

Speaking at the event will be a number of national and local personalities. Gary Johnson, the former governor of New Mexico who many think will be running for president as a republican in 2012, will be joined by New York Times best-selling author Thomas E. Woods Jr., who received his master’s from Harvard and Ph.D. from Columbia, as keynote speakers for the event. Also speaking will be Jim Babka, president of DownsizeDC, Tampa-based author and activist Tom Mullen, and Trevor Lyman, best-known as the architect of the 2007 “Ron Paul money bombs” which resulted in the largest single-day fundraising efforts in election history.

Launched in September, 2010, the Nullify Now! tour is currently scheduled to visit six cities around the country (Ft. Worth, Orlando, Chattanooga, Phoenix, Los Angeles and Minneapolis), with ten more locations being planned for 2011, said event organizers. The tour focuses efforts on educating people that whatever their political persuasion is, they can affect far more change on a state, rather than a federal, level.

For those interested in the history and use of nullification, tour speaker Thomas Woods’ Nullification: How to Resist Federal Tyranny in the 21st Century is one of the best arguments for using the controversial idea first conceived by Thomas Jefferson and James Madison.  (Spoiler Alert: Abolitionists in antebellum America found it particularly useful when refusing to enforce the ‘runaway slave’ laws.)

H/T: Forbes.com

October 5th, 2010 at 9:52 am
Arthur Laffer: States With Lower Income Taxes Enjoy Higher Growth, Income
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Arthur Laffer brought us the famed Laffer Curve, which plotted how higher tax rates can paradoxically reduce incoming revenues by inhibiting economic growth.

In today’s Wall Street Journal, Laffer adds to his legacy by showing how state income taxes lead to lower economic growth, personal income and population growth.  The impetus for Laffer’s analysis is ballot Initiative 1098 in the state of Washington, which would impose a new 5% income tax on individuals earning over $200,000 or couples over $400,000 per year.  An additional 4% would be heaped upon individuals earning over $500,000 or couples earning over $1 million.  Laffer crunches the real-world economic numbers, which clearly demonstrate that this is a destructive idea.  He shows that the nine states without a personal income tax enjoy 26.5% higher economic growth, 13.1% higher personal income growth and 9.4% higher population growth than the nine staes with the highest personal income tax rates. The highest-tax states also suffer 22% lower tax revenue growth and underperform in standard of living.

As Laffer neatly summarizes, “Each and every state that introduced an income tax saw its share of total U.S. output decline.”  He can’t stop states from descending into economic self-destruction, but he provides a great service by providing this warning beacon.

October 4th, 2010 at 10:45 pm
What the Economy Needs: Horse-Drawn Carriages, Candlelight, and Manual Bank Withdrawals
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The Los Angeles Times — that bastion of journalistic daring do — has discovered that recessions cause job losses. Don’t laugh — they will probably submit this to the Pulitzer people.

What really steams the Times’ clams, however, is that manual labor is being replaced by mechanical automation. Writing in this morning’s edition of the paper, reporter Alana Semuels notes:

Forced to cut costs during the recession, employers across the country are looking at ways to avoid hiring. They’ve accelerated use of computers and technology, replacing administrative assistants with software, cashiers with self-service kiosks and laborers with machines.

These structural changes mean some jobs that disappeared during the recession may never come back. Productivity gains are good for company profits and help the economy grow over the long run. But in the short term, the shift is exacerbating America’s jobless recovery.

Kudos to Semuels for at least noting the importance of productivity gains, but there’s a still something of a misdirect here. It’s probably an overstatement to say that employers “are looking at ways to avoid hiring” (my money is on the fact that most employers would love to be in a financial position to consider new employees). While there are many instances where shifting to automation is inherently superior to relying on labor, the scales are tilted by government intervention. Consider this passage from elsewhere in the article:

“Labor is so expensive,” said [farmer Mike] Young, whose great-grandfather started farming row crops in Kern County in 1910. “There’s their wages, truck, insurance, workers’ comp and the safety regulations. We went to a high-value crop that needed less labor input.”

Notice a trend? With the single exemption of trucks (and even that’s debatable given California’s automotive taxes), these are all factors created or exacerbated by government. California has one of the highest minimum wages in the nation, a heavily regulated insurance sector, and excessive workers’ comp and safety regulations. Technology may have an inherent economic appeal, but the challenge it presents to labor is only compounded by state government’s attempts to “help” the working man.

Apart from government distortions of the market, however, there is a bigger point to be made here. Technology’s displacements of the labor force may be jarring, but they lead to a stronger economy (the capital savings can be directed towards more productive investments) and an infinitely better life for all Americans. After all, we could have attempted to protect the horse-drawn carriage industry by suppressing the development of the automobile, subsidized makers of candlesticks and gas lamps by impeding the development of the light bulb, and employed many more bank tellers by standing athwart the ATM. But we’d live in a society that had made decisively less progress from 100 years ago than the one we currently inhabit.

This principle was captured brilliantly by the French political economist Frederic Bastiat in a satirical letter that he wrote to the French Parliament under the aegis of seeking “protection” for his nation’s candlestick makers:

We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.

When you’re 150 years behind the French on economics, you know you’re in trouble. Or that you work for the Los Angeles Times.

October 4th, 2010 at 5:40 pm
Ramirez Cartoon: Rahm Emanuel Gets Dead Fish At White House Send Off
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

October 4th, 2010 at 2:55 pm
TODAY’S LINEUP: CFIF’s Renee Giachino Hosts “Your Turn” on WEBY Radio 1330 AM
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Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her show “Your Turn.”  Today’s star guest lineup includes:

4:00 p.m. CDT:    Megan Brown, Senior Litigation Associate at Wiley Rein LLP re: the United States Supreme Court’s 2010 Term

4:30 p.m. CDT:    Sonja Eddings Brown, The Kitchen Cabinet re: Tea Party Influence over Republican Party

5:00 p.m. CDT:    Cindy Sarver, Crime Prevention Specialist, Santa Rosa County (FL) re: Violence Prevention

5:30 p.m. CDT:    Dr. Scott Barbour, Docs4PatientCare re: Repealing Obamacare

Please share your comments, thoughts and questions at (850) 623-1330, or listen via the Internet by clicking here.  You won’t want to miss this!

October 4th, 2010 at 1:15 pm
Dem Senator Announces Lame Duck Agenda Item

Who says Congressional Democrats don’t have a death wish for their party’s future?  Senator Bob Menendez (D-NJ) is openly stating his intent to pass an amnesty bill during the lame duck session between the November 2010 midterm elections and swearing in the new Congress in January.

And get this for his rationale:

“A lot of senators are retiring and might be willing to look at the issue,” Menendez said on CNN’s “State of the Union.” “We need something to jump off from if we’re going to go into it in the early part of the next Congress.”

What Menendez should have said is that a lot of senators will be nursing grudges during their four eight weeks notice of being fired, and might be willing to stick it to voters on a controversial issue.

If the liberals running the Democrat Party go through with threats like this to ram through unpopular agenda items during a lame duck session they will ensure minority status for their party for several election cycles to come.

H/T: Politico

October 4th, 2010 at 12:51 pm
U.S. Supreme Court is Back in Session

It’s the first Monday in October which means that the Supreme Court of the United States (SCOTUS) is back in session.  Uber-liberal constitutional law expert Erwin Chemerinsky is not celebrating the occasion.  Instead, he bemoans the conservative ‘take-over’ of the court and sites as evidence the fact that Republican presidents from Nixon to Bush II made a total of 12 appointments to SCOTUS while only two Democrat nominees made it onto the bench.  (Bill Clinton appointed Ruth Bader Ginsburg and Stephen Breyer, while Jimmy Carter was faced with no vacancies during his term.)

Chemerinsky, the dean of UC Irvine’s law school, singles out 4 of the 12 appointments (John Roberts, Antonin Scalia, Clarence Thomas and Samuel Alito) as proof of the conservative ascendency.  But for conservatives a success rate of 33% is hardly a victory; especially when considering that both of President Barack Obama’s SCOTUS appointments replaced Republican nominees, yet didn’t alter the conservative-liberal voting patterns.  Gerald Ford appointed John Paul Stevens, a man who ended his tenure as the leader o the court’s liberal bloc.  Bush I appointed David Souter, a justice who voted in lock-step with Stevens and the court’s other liberals.

True, Bush I gave us Thomas, and Reagan hit a home run with Scalia, but Reagan also put soul-crushing moderates like Sandra Day O’Connor and Anthony Kennedy on the bench; two people who repeatedly frustrated conservatives on issues across the political spectrum.  Ironically, at least to some, is the SCOTUS legacy of Bush II who made solid conservative appointments with Roberts and Alito.  That these two often team with Thomas and Scalia (and manage to cajole Kennedy to heed his better angels) is more the result of a historical accident than a carefully executed strategy.

Imagine the kind of country we could be enjoying had Republican presidents from Nixon to Bush I had a conservative justice success rate of 66% rather than 33%.  As it is, since at least the Eisenhower Administration (Earl Warren, William Brennan) liberals like Chemerinsky have benefited handsomely from liberal appointments by supposedly conservative GOP presidents.

October 4th, 2010 at 11:22 am
Video: The Duty to Remain Silent – Liberals Stifle Free Speech on ObamaCare
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With the numerous negative consequences of ObamaCare starting to materialize, CFIF’s Renee Giachino discusses efforts by the administration and the Left to muzzle the bill’s opponents and victims.

 

October 4th, 2010 at 9:45 am
Today’s ObamaCare Casualty: 3M to Discontinue Healthcare Plan
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Throughout the ObamaCare debate, President Obama promised that, “If you like your healthcare plan, you can keep your healthcare plan.”  Nearly every single day, however, it seems that yet another healthcare plan becomes a casualty of ObamaCare.

Last week, McDonald’s made headlines when it revealed that a low-cost “mini-med” healthcare plan for 30,000 employees may now be “economically prohibitive” due to ObamaCare.  Now, we receive news that 3M will discontinue a group healthcare plan for retirees not old enough to receive Medicare by 2015.  The reason?  “Health care reform has made it more difficult for employers like 3M to provide a plan that will remain competitive.”

The White House continues to wage a Soviet-style campaign against private enterprises that dare deliver the inconvenient news that ObamaCare is already destroying the healthcare marketplace, but killing messenger after messenger won’t change simple reality.